All Forum Posts by: Bruce Wuollet

You could set up one LLC with a Reg D syndication to own and manage the property, secure financing, raise investor capital and distribute profits. The sole and managing member of the syndication LLC would be your LLC as the operator (sponsor). The investors would be A shareholders within the syndication LLC. You, as the manager, would be B shareholders. This is relatively safe and secure while giving you, the manager, full management of the project and the syndication LLC. When done correctly, it clearly outlines the manager's duties, investors' risks and the syndication's projections. Go very cautiously when you are commingling funds. There are strict laws. I would consult with an attorney.

Thanks! I will check this out. I have all of the pieces in place I believe. If I have more questions I will check back with you. I appreciate your response. 

Thanks! This helps. It is a streamlined FHA 203k project. So, I think we are ready to go. I have a realtor, lender and the contractor lined up now. I believe I have all of the puzzle pieces put together. If I have more questions I may check back with you.

Personally, we mail letters, make phone calls and door knock. It's amazing when we have sent a letter to someone with no response followed up with a phone call and leave voicemail and then we knock on the door and we get a deal. Each individual is different. Recently we called and left messages. We mailed a couple of letters. Then we decided to go knock on their door. They were not home so we left a note with a hand-written message to call. They called. We bought the house. 

Everyone is different. Some like when you approach them (call or door knock) while others prefer to call you when they are ready. So, I would do any and every approach and not do an either/or as @Shaun Reilly said above. 

Pull out all stops. Never give up. Persist. 

Now, go flip a house. 

I would stay away from commission based fees unless you are a realtor. Take it per deal and see what you can get. If in the end you are about to lose the deal, $500 is better than nothing. In my world I say, 20% of something is better than 100% of nothing. So, do your best to get the deals cheap enough that it leaves room for you. In the event you are about to lose the deal, take whatever you can get. There are times I have taken a no-fee flip. It hooked up a buyer and they still do business with us today. 

Jody - thanks for your feedback. This contractor will have no problem fulfilling the requirements listed should that be all we need. He is currently doing projects for the City of Phoenix. He said certainly anything is easier than their requirements. They have a number of crews too. Thanks again. 

I have a property that would be good for a homeowner to purchase through the FHA 203k program. The lender says that the contractor must be licensed AND must be an "approved 203k contractor". Has anyone else ran into this? Or, is a licensed contractor sufficient? If they are to be an approved or 203k certified where does one find that and how does one become 203k approved?

There are no guidelines other than a little healthy sense and good negotiating skills. Greed will kill the deal and can kill a wholesaler. A good wholesaler will learn when it should be $2k, $5k, $15k, or whatever the number is. In the end the investor buyer (fix & flip) or homeowner should be making money on the deal. In our business our end buyers make more on the deal than we do, as they should. They are taking more time and more risk with the remodel and ultimate resale to a retail buyer. Or, they may fix it to rent and should end up with decent equity. This keeps them coming back for more deals when they are ready. I have flipped over 1,200 deals and my average is $4,800 per flip. The retail value on our deals is typically under $150k.  

Petra - I wholesale short sales from time to time. I simply do a double escrow with two title companies. The challenge, however, isn't with title or double escrows. The challenge we find are the deed restrictions and the contractual limitations that banks attach to the short sale approval letter. It is very important that you read and understand the short sale approval letter and that there would be no deed restrictions limiting immediate resale. The language and limitations very from "no resale within 60 days" to "no resale in excess of 120% of purchase price within 120 days" or similar restrictions. 

Ryan,

Full disclosure is better. I tell the seller that I am buying the property for immediate resale. I also inform the buyer when we have a double escrow that the double escrow exists. The last thing you want is a surprise or an argument at the signing table from either party. No need to create problems or 11th-hour challenges. My 2 cents. 

Bruce