All Forum Posts by: Alex Ficco

Cosmetic Fixer. Good opportunity for a fix and flip. This is an assignment of contract. Cash or Hard Money only. Message me for financing options.

ARV: $330k

Price: $220k

Message me for more info and full home inspection

Reno, Sparks, Carson City, Gardnerville, Minden, Tahoe, Fernley, Fallon, Dayton, Silver Springs, Mound House

 Have 150+ photos, walkthrough video interior and exterior, rehab info, comps, and a full home inspection included in the marketing package. It's a bit much for a post. Your friend can message me for more info. 

Full rehab needed. Good opportunity for a fix and flip or college rental. This is an assignment of contract. Cash or Hard Money only. Message me for financing options.

ARV: $375k

Price: $230k

Message me for more info and full home inspection.

Reno, Sparks, Carson City, Gardnerville, Minden, Tahoe, Fernley, Fallon, Dayton, Silver Springs, Mound House

Full remodel needed. Good opportunity for a fix and flip or buy and hold. This is an assignment of contract. Cash or Hard Money only. Message me for financing options.

ARV: $420k

Price: $270k

Message me for more info and full home inspection.

Reno, Sparks, Carson City, Gardnerville, Minden, Tahoe, Fernley, Fallon, Dayton, Silver Springs, Mound House

This is a topic that has been discussed many times on the internet forums with varying opinions… is wholesaling ethical?

I’ve been on all sides of this equation. I’ve been a brand new wholesaler that didn’t know anything about real estate. I’ve been a Buyer that sources their own off market deals. I’ve been a Buyer that buys deals from wholesalers. And I’ve also been a Buyer that wholesales many deals a month with good systems and a process behind it.

In short… Yes, it is… IF the personal wholesaling knows what they are doing. It’s when you DON'T know what you’re doing that it's easy to get caught up in deals where things go south, you say the wrong things, and you can be seen as unethical… even if by accident. And even if you don’t know what you’re doing, I think there’s still a way to do it ethically, which I’ll go over towards the end.

First, one of the most important things you can do to keep things ethical is to NOT misrepresent to the Seller. Setting proper expectations is HUGE. Even if you don’t mean to, you just don't know what you don't know. There’s a few ways this happens.

There’s a ton of wholesale 101 material out there that teaches people to tell the Seller you’ll close in 7 days, brush over the due diligence period, and promise them this is a done deal if you just sign here.

In about 150 deals, I can count on one hand the amount of times that the Seller truly NEEDED to close in 7 days. It’s not a necessary pitch, and all you’re doing is setting yourself up for failure. Title work takes time. The Buyer is going to need to walk it. MOST transactions would be pretty tough to pull off in 7 days even with YOU closing it and controlling that end of things. This is a great way for the Seller to be pissed at you on day 7 when you’re not even close to the finish line.

Same goes for inspections. You’re buying a house... It's a totally reasonable ask to have the seller give you 2 weeks due diligence. So be very clear you’re going to do so and don’t promise them this is a done deal. All that does is cause the Seller to be confused or angry in 2 days when it's you on the phone asking them for access.

Another thing I see with new wholesalers taking it TOO far the other way and telling the Seller that they are going to find a Buyer for them and get them the highest price and this and that. I get it why - you have no intention of closing (and probably aren't able to) - but now you’re talking like you’re REPRESENTING the Seller and barking up the ‘practicing real estate without a license’ tree. There are ways to tell the Seller that YOU are not going to be the actual Buyer without crossing into that gray area.

Second, and similarly to NOT misrepresenting to the Seller, just being able to perform is huge. Just do what you say you’re going to do and all is well. Of course, this comes from volume, experience, and skillset.

When we put a deal in contract, it always starts with setting proper EXPECTATIONS up front (timelines, access, process, etc), it continues with KNOWING THE NUMBERS (ARV, a reasonable rehab amount, and a max offer that works for both parties), and it's followed up by the transaction running EXACTLY how we told the Seller it would.

In this scenario, does it matter if we buy the home and flip it ourselves OR wholesale itl to another Buyer (One that has been vetted, released their due diligence, and can perform/close on contractual timelines)?

In my opinion, NO. It doesn't. Because we are controlling the transaction all the way through closing with our systems, our escrow, our team, and making sure we are doing what the Seller agreed to up front.

So how did we get to this point? Point 3. Be a real Buyer. From being an actual Buyer that has flipped many many dozens of homes, we know what ARV is. We know what realistic rehab numbers are. We know what price us and any other investor in town is going to be able to purchase the home at.

Knowing the numbers like this is a big reason why we are able to perform. The likelihood of us having to bail on a deal is super low. Major inspection findings, a weird title issue, or something on the Seller’s end are really the only reasons. All that aside from being willing and able to purchase the property of course!

So when you’re brand new, how can you wholesale ethically without also practicing real estate without a license?

In my opinion, the best way is to do acquisitions for a legitimate Buyer that you know can buy at volume, at least until you learn enough.

I’m not saying go get a job. You can still do it all - produce the marketing, take the calls and appointments with the Sellers, get the contract, etc. - but if you have a good, trustworthy, Buyer to lean on before you put the deal in contract, you can be so much more certain in your numbers when meeting with the Seller, you can learn a ton about rehab and what the actual costs are to flip a house, and when you get an offer accepted, you basically already have the deal sold, short of those major findings during inspections.

I ended up doing this by accident when I was first starting out. I found a good Buyer that was easy to work with, I marketed for properties that their company would buy, and he was trustworthy enough that I wasn't worried about him going behind my back for a deal. I still do deals with him today.

Because of this, I could send him detailed info on the lead and what I thought ARV and rehab was. He'd look at it and give me the number. If I could get a purchase agreement, it really was just sending his project manager to walk through, and playing TC until closing.

Assuming you can find a Buyer in your local market like this, it’s a win-win-win for all parties. The Buyer is going to get someone to bring them more deals, the Seller is going to get a transaction that actually happens the way you promised up front, and you’ll get to learn the business while doing easy deals.

Will you leave money on the table doing this? Of course, but do you want to max out your assignment fee on every deal when you’re brand new or do you want to learn a thing or two about this business so maybe you can flip on your own someday?

Anyway, there’s my take on the question that’s been discussed a million times. Depends who you ask, but more than that, it depends how you do it. Hope this helps.

This post could be a book so I’ll try to keep it short, but one thing I hear allllll the time at my monthly real estate investors meetup here in Reno, NV is “I Can’t Find a Deal!” or some variation of that.

I’ve never once heard this and thought “you’re wrong.” Actually... you’re right. Deals ARE hard to find… that’s what makes it a DEAL. But they aren’t IMPOSSIBLE to find, even when you’re brand new.

Further than “yep, it's hard, keep trying champ,” I think it would be valuable to go through a few reasons on WHY you can’t find a deal. As always, this is written through my current point of view - running a direct-to-seller flipping and wholesaling company dealing mostly with single family, manufactured, and condo/townhouse inventory in a higher price point market where cash flowing rentals are REALLY tough to make work - IE I’m used to going off market and finding deals that have enough margin in them to flip.

When I have these conversations with the new guys, even if they are putting in effort (we will get to volume towards the end), it becomes pretty obvious that they don’t know their numbers and often, not even their strategy.

For numbers, I get it, you don't know what you don't know, it comes with experience and looking at A LOT of deals, but you HAVE to pick your strategy when you’re starting out.

You can look at the same “deal” - a distressed single family home - and run the numbers 50 different ways depending on potential strategies. Do I wholesale? What about flipping it? Does this work as a rental? What about airbnb? Would the seller carry the note? What if I bring in a partner? Etc Etc.

This can go from “this could be my first deal!” exciting to trying to fit a square peg in a round hole pretty fast. It is much better to START with “wholesaling is the best fit for my short term limitations, skill set, and goals. I’m looking for wholesale deals.” If it’s not a deal, move on and follow up with the Seller later.

The second thing I see is the lack of confidence or straight up being scared to make offers. Do NOT take this as me telling you to put every deal in contract that you see JUST to see if it works, but if you THINK it’s a deal after underwriting it, make an offer! Finding out if it works for sure is what your due diligence period is FOR.

In the same lane, third is just being too slow in general. Too slow to underwrite and too slow to make your offer. I’m sure this depends on your market, but locally, single family deals are super competitive!

For MLS deals, everyone that's looking has probably seen it within the first day and many have already submitted a written offer. That's what you're competing with. Getting faster with your underwriting will come with looking at more and more deals, but you'll always have to be on top of it.

This may be surprising, but it’s pretty much the SAME with off-market deals too! Almost every single deal we contract has competition. If its PPC, the Seller has submitted to every Buyer they can find online. If it's direct mail, the Seller has called every mailer they’ve received and saved over the years. Sellers are getting cold calls from many investors (and agents) dialing the same lists. It is what it is. You still have to be fast even if the house isn't listed.

Lastly - and probably most importantly - it's a volume game and you’re just not doing enough. This goes for leads and offers made. When you’re new, you have no idea what the volume is going to have to be to do deals. Even now, our metrics change all the time based on market conditions, lead source, skill set of the team, etc. But at the very LEAST, just know it's going to take WAY more than you think.

Just think about it. In the last year, we’ve closed 1 out of every 12 PPC leads. These are some of the highest quality leads we get along with the systems and team to qualify these leads quickly and take appointments with the Sellers.

Every month, I talk to newer investors that have spoken with 3 or 4 home owners, have taken 1 appointment, haven't made any offers, and they can’t figure out why they haven't been successful yet.

If someone with experience closes 1/12 leads that are good quality, what are the chances that you talk to your 3rd Seller that's a FSBO on Zillow, take an appointment, they accept your offer, your numbers are spot on knowing little about rehab, and you can close the deal? What about your 20th seller? 50th?

All in all, “deals” are subjective. Even within the same strategy - IE single family fix and flip - a great deal to someone might be a hard pass to another. There also isn't a secret magic formula to getting deals. We don’t do anything that no one else does. Things in marketing and real estate are always changing and we are always trying to improve the process.

Through more lead volume comes more experience in all aspects of the deal, more confidence, and greater speed. If you’re just starting out, do yourself a favor and recognize that you probably need to put in WAY more volume than you thought, trust that all these things will come in due time, and save yourself the doubt and stress of saying “I Can’t Find a Deal! This Isn’t Working!” after 30 days and 6 phone calls. Hope this helps.

While running my local real estate investors meetup here in Reno NV every month, some of the top questions I get from newer investors has to do with being a licensed real estate agent. This question comes pretty split as “Should I get my license to be an investor?” and as a conversation starting with “I’m in the process of becoming licensed...”

There are definitely pros and cons to be licensed as an investor, and it seems like most people only think about the pros. As always, this post is written from my narrow point of view, gained from running a direct-to-seller single family flipping and wholesaling company in Nevada. Obviously, I can’t describe every single nuance in one post and real estate laws differ greatly from state-to-state, but here are some of my takeaways from starting out unlicensed, getting my NV Real Estate Salesperson license, and becoming unlicensed again.

Before we get into pros and cons, by far the number one justification I hear for wanting to become licensed as a newer investor is for the educational aspect. I think I can speak for all licensees when I say you don’t learn jack **** during the licensing process, aside from things that will help you pass the test. The NV post-licensing continuing education course was far more insightful on how to actually complete a real estate transaction. And to learn anything at all about investment… forget about it.

When someone tells me they want to get licensed strictly to learn, I always follow that up with “Do you want to work as a real estate agent?” If the answer is yes… cool, get licensed. If the answer is no, I think the cons outweigh the pros.

To go through some of the pros, the biggest one I see from a flipper’s point of view is to be able to list your own flips and not pay yourself as an agent. Depending on price point, that extra savings of 2.5-3% can mean deal or no deal in a competitive market.

If not getting paid for a listing wasn't a good enough pitch, the next pro is using your license to make additional income. Just like anything else, being a GOOD and top-producing agent is hard, but to get layup listings from your personal sphere as a part-time side-gig agent is pretty easy work.

Last point on commission. If you're actively BUYING deals on the MLS, it's nice to be able to negotiate away your own commission to make your offer more attractive to the Seller.

Other than that, I don't really think ‘MLS Access' is some great thing like its cracked up to be. There are a few advantages, but you can comp property just fine using free tools like Zillow or paying for a service like Batch Leads. You can also be set up as a realtors "assistant" to get MLS access for like $25 a month without being licensed. Access to the FORMS to be able to write offers on listed deals is more important to me, but again, good relationship with an agent will get you that for free.

Last point for the pros. I think it’s easier to talk to Agents if you are also an agent. If you know what you’re talking about, know the language of the industry, and are good on the phone, it's not an issue either way, but even with that, “This is Alex with eXp realty” vs “This is Alex with Reno Area Home Buyers” worked better. Agents are just used to hearing "[name] with [brokerage]."

Sounds great, you’re ready to get licensed now right?

Yes it costs money to become licensed and to stay licensed, but that didn’t even make my list for cons.

Most people don’t realize that they have additional liability when they are licensed. Even if you are direct-to-seller, and aren’t using your license in any capacity, you’re still a licensee. You’re considered a professional. Act ethically and it probably won't be a problem, but if there is a problem for whatever reason, you still have to defend as a licensee.

Piggy backing off of that, one POTENTIAL pro that I hear all the time is that “I can list all the deals that I don’t buy.” Yes you can… BUT I think it much better (and safer for you) if you are totally clear on which hat you’re wearing before the appointment with the Seller starts - are you the buyer or the agent?

It’s two totally different relationships. A Buyer and a Seller are opposing parties in a transaction. A listing agent and a Seller are on the same team. The agent has a fiduciary responsibility to their client.

You can see how it gets very gray very fast when you pivot to “Well I could list it for you! I think WE could get $300k in as-is condition on the market” when 15 seconds ago, your max cash offer was $225k. Just refer it as a listing to another agent.

Lastly, and this one is definitely a NV state specific thing, are the marketing laws. I'm not a lawyer and this is not legal advice, I’m just some guy that has been forced to dig through the code to defend his own complaints lol!

In Nevada, all licensees (should) know about the marketing laws. If you’re advertising for services that require a real estate license - IE representing buyers and sellers - you need to have your name, license number, and brokerage logo prominently displayed on the marketing piece.

Now, what most licensees DON'T know is that there is another section of code that is for licensees advertising for services that DO NOT require a real estate license - IE purchasing a home. The code states that you have to disclose you’re a licensee on the marketing piece and that's it.

On all of the mailers that I sent out (after learning this the hard way when I WAS in the wrong), there would be a disclosure at the bottom of the mailer that said "Alex Ficco is a NV real estate licensee license # XXX with eXp realty. If the property is currently listed, please disregard." According to my interpretation of the code, this is OVER disclosing. According to other agent's knowledge of only the marketing laws mentioned above for services requiring a license, this is a violation and DEFINITELY grounds for a complaint to my broker, the division, the MLS (why? lol), or whoever they can tell.

Ironically, following the marketing law as a licensed investor caused MORE issues than when I was doing it wrong. The complaints were never from a Seller, only from other agents. For me personally, since I never really used my license all that much and only work in the investment business, It made more sense to be unlicensed.

So there’s my not so short post on a few personal pros and cons for being licensed as an investor. As always, the answer to the question is… it depends. Hope this helps.

A Bigger Pockets member located in Austin, Texas reached out to me in the DM’s earlier this week with a well thought out question that I think a lot of people could also benefit from hearing about. I’ll do my best to summarize the question and my answer with context below, but in short, he’s feeling stuck because it's hard to figure out which route to take in real estate. Even if you know the strategy, it's STILL tough to figure out what the “best” play might be sometimes.

99% of the time, at least SOME resources are limited for all of us, whether it's time, money, people, skillset, etc. When I got started 5.5 years ago, it was pretty much everything but time, haha! Wholesaling was something I found that I thought I could at least start with little to no money, and something I could tackle by myself.

This guy is in a much different situation. He owns a primary residence that has about $325k in equity if he were to sell it today, he wants to downsize, AND he has more available cash in addition to the equity from the sale. He presented 3 scenarios that he had thought of:

1. Keep the house and rent it. It would rent for $3000 per month and his payment is $2300 per month. Then he would go put 15% down on a smaller new construction home as his primary worth $375k.

2. Sell the house and go pay cash for the smaller new construction home worth $375k, and also purchase a rental property in a different market with a loan, but the rental won't cashflow until rates come down.

3. Same as number two, but put 40% down on each the primary and the rental. The rental pretty much is a break even when looking at cashflow.

He was MUCH more detailed than that, gave me pros and cons of each scenario, etc (which I really appreciated. Often I get “what do I do?” questions with 0 context and it's impossible to even begin to answer). So I also gave him a very detailed response, but the root of it was my favorite response… ‘IT DEPENDS.’

Whether brand new with NO resources or experienced WITH resources available, I think we all get caught up in scenarios like this more than we’d like to admit. I know I do.

My advice to him began with ‘IT DEPENDS!’ haha, jk.. I had to type out the response, then go back and put in a note about ‘STARTING WITH THE END IN MIND.’

One thing I didn’t know from his well thought out message was what he actually wants (besides downsizing his primary and using the change as an opportunity to invest) out of this play. What’s the end goal?

I went into a pretty detailed response that I thought a version of option 3 would be the best, mostly because option 1 and 2 seemed like a horrible return on his $325k of equity to me - Keep the house as a pretty ****** rental in terms of cashflow OR go pay cash for a smaller house and buy another ****** rental. Either way, all that equity is locked up in a house short of using a product like a HELOC to access it.

My version of option 3 was to put 20% or less down on his new smaller primary and use the remaining $250k+ to go buy rentals that actually cashflow.

The more I typed out my response, the more “OH BUT WAIT…” nuances started coming out.

I began with suggesting finding good distressed deals in a cashflow heavy market so he could have a shot at doing some full BRRRs and buy as many as he wanted. I'm a flipper and wholesaler… finding those deals is what we do! OH BUT WAIT… does he have time to find his own deals? Has he ever rehabbed before? Is he actually comfortable with investing in a non-local market?

Well… maybe a better model for him would be paying cash for a couple turnkey SFRs and then leveraging to get at least MOST of the cash out so he could buy several of them. OH BUT WAIT… does he even want to leverage? Maybe he’d rather have less of them and have them free and clear for more cashflow and less risk. Does he even care about being in a cashflow market? Does he care about appreciation more?

Well… maybe a better play for him would be using the $250k+ as a down payment for a single, bigger opportunity to force much more appreciation than he’s going to get in a 3% annual appreciation rental market. OH BUT WAIT… does he feel comfortable or have the skill set to go bigger on his first deal? Back to the time thing, does he have enough to operate a deal like that? Would he be able to find a partner if not? Would he even want to partner with someone? Wait, what’s his time horizon on this deal anyway? Is this a 5 year timeline or a 30 year timeline? Back to square one…

You get the idea! It's impossible to answer these questions for ourselves or others unless we are super clear on what our restrictions, resources, and end goals are.

Of course the decisions are important, but it's my opinion that making the decision and going after it is FAR more important than making the PERFECT decision. And that’s what's hard about real estate at any level… IT ALL WORKS.

I've done flipping, wholesaling, BRRR's, long term rentals, short term rentals, ground up construction, single family, multifamily, land, seller finance, etc. Have I bought some bad deals? Yep. Have I bought some good deals? Yep ( luckily more than the bad ones). But I say this because I never would have got to do any of it if I didn't make the decision to JUST wholesale first. I picked that, learned that, then did the rest later. There are pros and cons to everything and there's always trade offs too.

So even within the same strategy, with the same resources, and in the same asset class, there are STILL a ton of ways to skin the cat. As long as you’re not totally going in blind and being completely reckless, start skinning! You can always switch it up later. Hope this helps.

I’m actually a huge proponent of education and courses, good ones at least, so don’t take this the wrong way, but there’s usually a HUGE gap in what is taught online and what the reality is when running a direct-to-seller model in a flipping/wholesaling company.

The concept is easy enough. Find a motivated seller and put the deal in contract for a price with enough margin to flip it OR enough margin to sell the deal to another investor. Through my local facebook group and the local meetup I run in Reno, NV, the questions I see pop up over and over again are actually the EASY part - finding deals, finding buyers, who to use for escrow, contracts, etc.

You don’t know what you don’t know, so you’d never think to ask about anything else when you’re new, but the PROBLEM SOLVING we deal with on just about every single deal is what really makes things complicated.

In the last few months, we have closed some crazy complex deals, which is what has me wanting to share some of this. These are deals with absolutely no chance I could’ve closed when I was new, and the situations are unique to every deal, so there’s no way you could teach all of it in any type of course - and ‘How to help the seller break up a brutal dog fight in the front yard while the neighbor comes out screaming “I got a gun! I got a gun!”’ is not as appealing as ‘How to make an extra $10k a month on the side!’ for course material - more on that later.

As outlined in a few of my previous posts, a lot of people instantly forget about the MOTIVATED part of the term ‘Motivated Sellers’ as soon as they start marketing for deals. Motivation and distress can be used interchangeably. And where there is distress, there are problems that need to be solved.

All of our Sellers need the ‘easy button’ for one reason or another. That’s what we offer them as investors - quick close, cash, as-is condition, blah blah blah. Again, that’s the part that’s a given. Most of them need much more than that to transact.

Some of the problems we see with Sellers we buy from revolve around money - they need proceeds from the sale to even move out in the first place. Doing a holdback - closing on the deal, holding back $5k in escrow, and giving them 7 days to move out before getting the remaining $5k - is a great way to do it.

Other times - we’ve released proceeds early - just giving them money before the deal is closed - although we require that the deed / final closing docs have already been signed, and the proceeds needed are related to the transaction closing. You have to be very empathetic to people's situations, but with that comes a higher chance of getting taken advantage of, which is why we don’t just release proceeds early with no protection or for no rhyme or reason.

Other common issues we see revolve around moving. I can’t tell you how many rentals we’ve found/done all the leg work for, potential houses we’ve found for purchase, realtor referrals, lender referrals, setting up movers, paying for movers, moving our closing date to work with their other transaction, etc etc.

Again, cool… you found a deal, put it in contract, and found a buyer. Great. Sit back and wait for the closing date! …. until the date comes and you learn the Sellers haven't even started to move out yet, have no path forward to getting moved out, and the Buyer has his trashout guys scheduled for the next morning.

Something like that happens to you and you figure out pretty quick that you have to play transaction coordinator on every deal - follow up with the Seller, follow up with the Buyer, follow up with Title, etc. This is basically how I learned and slowly developed the process we follow today - problem happens, solve the problem, try to not let it happen again.

But some problems cant be solved through improving the process. When I said the thing about the dog fight… yes, that just happened last month coming up on 150 deals in. That’s getting its own video on youtube in the coming weeks, but 10 minutes of watching a dog almost die, screaming, throwing rocks and pieces of gutter found in the front yard, neighbor with the gun, etc… yeah. I don't think I could’ve done much to get ahead of that or will do anything differently in the future. **** happens.

Although my chances of a dog fight seem to be about 1/150, it's a good example of the crazy **** we deal with. It comes with the business, and it comes with the people that it truly makes sense for them to take a discounted cash offer on their house.

This post isn't about how to deal with XYZ, I guess it’s more of a post about preparing yourself for unexpected problems to come up, because they will… all the time. And it's also a reminder that doing acquisitions in this model isn't really about the real estate. Yes that’s how you come up with your offer, but that’s just the product that you sell LATER - whether it's the deal as-is to another investor for a wholesale or a remodeled product to a retail buyer after the flip.

The product you're selling FIRST is problem solving. It’s all about the Seller and how you can help them, not about the house. It just so happens that distressed situations and distressed-condition property go hand in hand, but not all the time. Hopefully this helps.

Hey y'all. Reminder for our meetup tomorrow night from 6-8pm. Info below. Free to attend. Hosted by Reno Area Home Buyers at The Ant Space in Sparks - 1925 E Prater. Thanks!

TOPIC: DEAL DEEP DIVE!

Front to back on a recent wholesale deal that we closed. Tons of issues and drama with this one, so it's a great learning opportunity for you all to outline some of the realities of getting a complicated deal to the finish line.

We will go over everything from how we found the deal, qualifying the lead, contracting the deal on the appointment, assigning the deal, dog fights, windows being broken out while in contract, and much more.

6:00pm - Attendee Introductions

6:20pm - Topic Discussion

6:50pm - Q and A / Open Discussion

7:30pm - Networking

8:00pm - Finish