All Forum Posts by: Dan Koch

I have 2 difficult neighbors on either side of a rehab. I have done everything in my power to accomodate and yet they both continue to make things very difficult.

The lastest incident was a voicemail that I recieved. The neighbor claims that she got a nail in her tire and it was because of my guys leaving nails in the alley. We pick up and roll a magnet every single day and now this lady is telling me that I owe her $165 for a car tire.

Could it have come from my guys.......maybe. Could it have come from the hundreds of other places this lady drives........maybe.

Anybody have a similar problem and what is the best way to handle it?

Let me clarify. I use this lady to write all my contracts on my rehabs and then on the back side she lists and sells them for me.

I guess I feel just a little worked up about the entire deal.

So, do I have a right to be angry with my agent. I have worked many angles over the years in real estate. Right now I am in a fix and flip mode and have been looking for a certain type of deal which is relatively hard to find in my area.

My agent has one of her listings that is coming up as a short sale. I walked the property with her and we both decided that I would submit a contract to get the short sale rolling.

I get an email today from her saying that my highest and best offer is due by 5:30 today because she has another contract that was submitted. The property was just put on the market less then 24 hrs ago.

I now feel like I am in a "pissing match" and the whole idea of having a leg up on the property because it is my agents listing has all gone down the drain. I am really PO'd about the entire situation.

Thoughts?

I think a lot of rehabbers don't realize that nearly every imperfection that they "believe" will go unnoticed will be exposed once the buyers home inspector inspects the property.

I've been guilty of this myself through the rehab process. Every time I make a decision to either fix or not fix something, I have to remind myself of this.

On the positive, you learned your lesson and got paid for the education (7500). Could you have made more? Yes! Could you have made less or taken a loss? Yes! On to the next one!

I may do that Dale. My buddy who owns a concrete company has a guy he uses to make drops of 10,000 flyers at a time. Guess I will try that in my target zips. That should get the phone ringing.

I've bought a hud home before, but never wholesaled them.

What is the whole deal of setting up a Non for profit to wholesale Hud homes?

Also, are there any challenges to wholesaling them as opposed to conventional wholesaling?

David,

It was her responsiblity to either have the fee put on the hud or to double close. If it was a regular wholesale deal then title should have been able to double close using your funds, she wouldn't have to bring anything to the table.

If it was a shortsale, she would have had to get transactional funding to double close.

Either way, she should have had this laid out in her plan when she approached you. As a wholesaler and Investor myself, I never ask my end buyers to do anything but sign a purchase agreement if they are ready to buy.

It sounds like lack of experience got the best of her.

Michael,

There are several ways a wholesale deal can be closed.

On an assignment of contract you would see the original contract between the wholesaler and seller. You and the wholesaler would agree to the assignment fee and at close title will cut the wholesaler a check for the fee.

Another route that the wholesaler could take is to double close the deal. This is where there are two separate contracts involved. There is a contract between the seller and wholesaler then a separate contract between the wholesaler and buyer (You).

With the double close you would have no knowledge of the previous contract. In this case, the wholealer pays closing costs between the a-b and b-c transaction, but it protects or hides the spread. Typically I use this approach if I'm working with a buyer I don't know well or if I am making more than 10k on the deal.

Make sure in your package you tell your perspective buyers about the tenant history if your seller tells you. Long term, new tenants, how long the leases are for.

Also is it market rent or section 8? Is there a potential for improvements allowing the future owner to raise rents???

Also talk about any capital improvements that have been performed. i.e. systems, roof, etc.

If I am understanding this correctly there is a 2nd wholesaler trying to make money off of a property that another wholesaler has tied up???

If this is the case you need to be working directly with the guy who has the property under contract.

This is why I never let other wholesalers shop my deals. They can bring me a buyer only "if we prearrange a fee" for them.

I understand what this guy is trying to do.....it is not uncommon for newbie wholesalers to get into real estate and start trying to shop other peoples deals even if they don't have permission.

Bottom line, get in touch with the first wholesaler. The second guy should have an arrangement with him and be getting paid through him, not by you.

Oh, and don't give him any earnest money. I'm sure you know this, but only give your escrow money to the title company, not some guy trying to shop another wholesalers deal.