All Forum Posts by: Bryan Normal

First time vetting hard money lenders for a flip I have under contract but not closed yet. One potential lender has attractive terms (8%, 2 points, 100% financed, no prepay penalty), but on the phone he has very spotty English so it's hard to talk to him, and his contract seems suspicious in areas too. However, he does appear to be registered with the State of Ohio as a business entity, and also "Licensed by the OHIO Bureau of Real Estate (BRE) (#01925898)", which I could not find this organization via Google (I am in Michigan). In his loan terms sheet, he is asking for about $1400 Loan Origination Fee, and my bank account # and routing # to deposit into. His address for his company is just a UPS Store mailbox, and the phone number is just his cell.

Does anyone know of ways to sure-fire guarantee he's not trying to rip me off, short of just not using him? His website seems mostly legit (The Private Funding LLC) and his loan application does too. I can also offer the loan application he sent over, if that helps. Thanks for any insight anyone might offer, I'll probably run it by a lawyer tomorrow.

First time vetting hard money lenders for a flip I have under contract but not closed yet. One potential lender has attractive terms (8%, 2 points, 100% financed, no prepay penalty), but on the phone he has very spotty English so it's hard to talk to him, and his contract seems suspicious in areas too. However, he does appear to be registered with the State of Ohio as a business entity, and also "Licensed by the OHIO Bureau of Real Estate (BRE) (#01925898)", which I could not find this organization via Google (I am in Michigan). In his loan terms sheet, he is asking for about $1400 Loan Origination Fee, and my bank account # and routing # to deposit into. His address for his company is just a UPS Store mailbox, and the phone number is just his cell.

Does anyone know of ways to sure-fire guarantee he's not trying to rip me off, short of just not using him? His website seems mostly legit (The Private Funding LLC) and his loan application does too. I can also offer the loan application he sent over, if that helps. Thanks for any insight anyone might offer, I'll probably run it by a lawyer tomorrow.

Does anyone know if you can transfer a GR rental certificate of code compliance upon sale of say, a duplex? Currently looking to purchase a duplex that just recently got a 6-year cert, and was thinking maybe a quick form could transfer that certificate with the property to my name. 

@Drew Sygit Just curious as to your level of experience with wholesaling? Thanks

@Yoann Dorat Good info, I'll look into the Delaware LLC... And the more I call around and talk to local people, the more it sounds like your recommendation of finding a local broker experienced with direct wholesaling knowledge is the way to go.

When you say "any of the national brokerages", I assume this even includes eXp? I was under the impression they were more investor-oriented and a decent option. Thanks!

@Scott M. I've already spoken to multiple brokerages that don't take a cut on my personal investment deals, as I said in my original post. So that is not a concern of mine, as I both have no desire to nor intend on giving a broker a cut of my investment deals, unless of course they added some value like gave me the lead... My question is of disclosure- to what extent I need to tell a lead that "I work for such and such brokerage and yada yada yada...". I know I already need to check the box on the contract that says "Agent", but past that I would prefer not to be discussing the Agent affiliation any more than is absolutely necessary with a lead. And that goes for my marketing materials too... I would prefer not to be putting a huge "ABC Brokers!" logo on my direct mailers or door hangers... I think I just need to find an agent in Michigan who finds their own off-market investment deals (wholesaling, flipping, buy/hold, etc) and see how they navigate these grey areas. As an aside, it's no surprise that throughout all of the Michigan RE course, this area about agent salespersons own personal RE transactions is one of the most vaguely worded.

And just to clarify on the above, I thought a possible loop-hole would be the double-close as the agent acting as a wholesaler would be temporarily taking title in their name/ ownership, but for a salesperson the law says "A salesperson may advertise to sell property under his or her own name if the property is his or her principal residence"

Compared to for a broker, "Any individual licensed as a broker or associate broker may advertise personally-owned property for sale or for lease in his or her own name."

I get the impression it is not legal to double-close real estate in Michigan unless you involve a brokerage in some way because it would not be your principal residence.

So I wanted to wholesale (as a vehicle to eventually get into flipping) before I ever wanted anything to do with becoming an agent. Then I discovered the Michigan 5-transaction rule, and figured "Fair enough, I'll bite the bullet, be above-board, and just get the license". I have a sponsoring broker lined up, who knows my investment intentions, and I am currently studying the course materials.

In the legal part of the course, it states, "Any advertising done by a salesperson or an associate broker must be under the supervision of and in the licensed name of that individual’s broker. Effective January 1, 2018 the Occupational Code was clarified on advertising stating that the salesperson or team name cannot be larger than the broker’s name. This rule only regulates relative type size (i.e., points) and does not require similarity in type style, boldness or italics. Exceptions: A salesperson may advertise to sell property under his or her own name if the property is his or her principal residence. A salesperson may advertise property for rent or lease under his or her own name if the he or she is the owner of the property."

Given that wholesalers are already expected to be basically licensed now (or go through an agent on transactions over 5), how do licensed agents who want to wholesale, do so without taking commission or running it through their brokerage? I am fine with disclosing to someone that I am an agent, but I don't want my wholesaling efforts (marketing, and closing contracts) to have the brokerage involved. My brokerage said this was fine too- they said any investments we do, they don't expect to be involved in.

Any clarification on this would be great. If assigning contracts is legal, which it clearly is, then wholesaling is legal. And if double-closing is legal, which it clearly is, then wholesaling is legal. But these laws seem to be strongly trying to make wholesaling illegal through other means, so that a brokerage gets a cut. I understand I'm held to a higher standard as an agent to disclose, but I am only becoming an agent in the first place because I was forced to legally. Thanks!