All Forum Posts by: Austin Smither Langley

This chart below comes from the Houston, TX MLS to show the difference between what properties list for and what they sell for. Based on this chart it's over $25k on average.

This will be market specific, but I wouldn't jump to say that $20k below asking price is a deep discount nor that the listing agent is doing a very poor job because this sounds typical based on this chart.  Homeowners, on average, want more than what they can get and the market brings them back to reality.

Both can be good strategies.  It depends on your goals, neighborhoods, etc.

Cheaper areas could have less reliable tenants whereas good school districts tend to bring in longer term tenants.  However, it can be harder to bring in cash flow in a nice home in a good school district because better school districts usually have higher property taxes and higher property values.  The right cheap area could be ripe for development and appreciation compared to a more stable neighborhood., but as always it will depend on how good the deal is.

@Daniel Han the median home price in Houston is around $250,000 right now.  That said, there are many opportunities below $200,000 and $100,000 depending on area and/or rehab needed.

I agree that 4.4% appreciation sounds optimistic, but many successful real estate investors can generate higher returns that the stock market.

Real estate, like the stock market, is just one of many places that you can park your money to generate wealth, but one that you can have more control over with the right knowledge and experience.

 I would ask those people what the issue was if they disclosed everything correctly.

There's a lot of misinformation out there and many people (including in these forums) that will tell you you need a license, disclosure isn't enough, etc. despite what the Texas regulation clearly states above.

A broker is an agent who conducts negotiations for and on behalf of a principal (person or entity that they represent).  They aren't the buyer or seller, they represent them.

Why now would anyone bother becoming a broker if I can get a property under contract and market it?  One might suspect that this is why some brokers/agents talk bad about wholesalers - it takes away business from them!

From what I know, disclosure and honesty of what you are doing is key to doing it correctly if you only have an interest in the property and don't own it yet.  If you are selling a contractual interest to a buyer by selling them the contract, you need to disclose that you are selling the contractual interest, not the property itself.

I'm not going to speak to a hypothetical situation or state, but in Texas and many other states only having a property under contract can give you an equitable or contractual interest in the title and a right to the property.  If a wholesaler does not have a property under contract and markets it to buyers, that is a big no no - they must have at least equitable/contractual interest and a right to the property which in Texas means you at least have it under contract.

It's actually quite straight-forward: Don't market something you don't have the legal right to market and disclose all information to all parties.  This can vary based on state law.

If people like act like @James Wise and go around a wholesaler to steal the deal from them, the wholesaler (in Texas and many other states) could file a memo on the property because they have the legal right to do so and prevent the title from being conveyed to people doing what James does.  The seller has defaulted on their contract with the original buyer and there can be repercussions for that.  There are actual legal protections for buyers in an attempt prevent sellers from backing out of a contract for a new buyer because the original buyer has spent time, money, and signed a contract for a right to the property.  That is an example of how even though you don't completely own the property, you can have rights to it by having it under contract.

In Texas contractual interest in a property can be marketable if everything is disclosed and done correctly.  Here are the Texas Real Estate Commission's comments to clarify this: https://www.texasrealestate.com/members/posts/further-clarification-about-trecs-new-equitable-interest-rule/

Wholesaling, as we've discussed, can be done in numerous ways and may depend on state law. In general though, I would define wholesaling as getting a home under contract and finding a real estate investor willing to buy the property or the contract at a higher price. The wholesaler makes the difference for their efforts marketing and finding the deal.  Regulations can vary by state so it can be hard to generalize strategies, methods, and technicalities for the entire country.

"Well 1st thing I need to tell you all is that Wholesaling as it's taught is a myth. You need a license to Broker real estate. That's all wholesaling is, it's brokering real estate"

First response to this thread from @James Wise

If you read through this entire thread you can see that I'm not trying to to defend any model. I'm responding to false legal statements and attempting to stop the confusion that they cause for new members - they are who I'm standing up for here. There was no debate here until people came in saying it's wholesaling is illegal...I'm just trying to stay positive and provide accurate information here for beginners.

@Jay Hinrichs you have previously defined wholesaling to me and others as illegal, but you are correct that there are many ways to do it and it's not well defined (at least in legal terms in some states). You are also correct that being an agent and/or wholesaling is not for everyone. Not every occupation is a good fit for everyone and not everyone's experience is the same, but that doesn't mean we should discourage people from learning about them on this site like you did to me when I was getting my license and you told me that wholesaling is illegal in any state.  Just my two cents for what it's worth.

The ruling is pretty straight forward - basically be honest and disclose everything.  What is the grey area are you referring to?