All Forum Posts by: Michael G.

To me, K. Marie Poe is what a REAL wholesaler is. A dealmaker that has the funds and ability to purchase properties at a discount. There is too much "guru talk" in our business about buying real estate with no money, no credit, no experience. You know why? Because that SELLS guru materials to people with no money, no credit, and no experience... But the reality is, "investment" involves investing more than just time - it takes money. Can a person fresh out of a guru course make it? Sure - especially if they have capital. But a guru course does not make a person a true "wholesaler". In my opinion. It takes assets, relationships, negotiation skills, and intelligence about the local housing market...

See thats just it. REAL wholesalers DONT use their own money...thats one of the nuances of the trade of wholesaling. REAL wholesalers use OPM.

GURUS exist in every facet of the REI game as well as other investing disciplnes. Snake oil exists every where.

I absolutely agree with your last sentence but any newbie wholesalers out there reading this post dont get it in your head that you need money to do deals. Its absolutely NOT true.

Wow Justin. It just sounds like you are in denial about your role in the deal.

Forum writing leaves a lot open for interpretation sometimes so I may have it wrong but it sounds like your pride wont let you admit that you bought the property wrong.

Then you want to go on and launch a headlong assault on wholesalers and how they are tainting the business?

The more I listen to you my friend I'm convinced that the wholesaler in this deal did nothing more than seize an opportunity.

Its actually kind of shameful that you made and continue to make this post about how bad wholesalers are vs how your deal analysis went horribly wrong.

The bigger and better question to ask your fellow rehabbers is how you can benefit from using a good wholesaler but it sounds like you know everything already so your pride probably wont let you have that conversation.

Is she a PM or does she work for a PM company?

I wonder if there is some conflict of interest there? For better or worse?

Whats the advantage? Do you get a discount?

What if's:

Shes not a good property manager?

She doesnt pay her rent and you need to file eviction? Is she going to file an eviction on herself in a timely and just fashion? Where is the impartiality?

I could think of a number of upsides - She would never have far to go to get assistance. You should never get late rental payments.

You have to ask yourself do the pro's outweigh the cons?

I neglected to provide suggestions in my last post...

I think the best investors are great marketers.

Market, market, and then market some more. Guerilla market, direct market, online market, etc.

Then...follow up, follow up, follow up and then follow up some more.

Bandit signs and direct mail marketing work well for me.

I wonder if the wholesaler were to tell the story, if it would be delivered the same way?

Was this a case of the wholesaler making too much profit or you doing absolutely too little due diligence on the deal?

You said the wholesaler stuck firm to his price? Did he hold a gun to your head and make you sign the contract?

I usually approach the deal a little differently than the wholesaler in question.

When I ask my buyers how much they would pay I usually include my fee whether its 5k, 8k, 10k. They then calculate their purchase price with my fee in mind and its all good. And thats only with the cash buyers I know.

If I dont know you, I do my own analysis and give you the sale number with my fee factored in. If you cant pay that price and I cant negotiate any more on the purchase price then this is not the deal for us to do together...and its on to the next buyer.

Every deal is not for every buyer. Some of my cash buyers will pay more than others for a deal.

Wholesaling 101 - Leave enough meat on the bone for the end buyer.

Rehabber 101 - MAKE SURE there is enough meat on the bone.

If I were a rehabber I would say to a wholesaler "this is how much I can pay for this house with your fee included, whatever that is".

You really should not be counting the wholesalers money as long as you are making the profit you need to make.

I'm still trying to understand how you bought a home for too much money after seeing the house in person, factoring in your repair costs, holding costs, etc and the ARV?

At some point your deal analysis should have sounded the alarm...NO?

I feel bad that you cant find a good wholesaler to work with but i think you need to take some ownership for making a bad business decision and not using an out clause to cancel the contract.

Just for my own edification are you saying you NEVER bought a good deal from a wholesaler and that ALL wholesalers youve encountered have been bad wholesalers?

$65K will get you a decent turnkey single family rental in Allentown PA with a $900 a month rent roll.

I would go to ussearch.com and run a instant people search for $2.50 (they have a two for one special going now.)

That report gives you a relatives and associates summary.

You will have to run another instant people search to get a phone number for those relatives or associates but at least you will have an idea of who could be a possible heir how to get in touch with them.

The cost is a legal one and is best suited for an attorney. I remember 2K-2.5 in NY back in 07. It may be different in your state because costs are regional.

Some attorneys may be willing to take the fee at closing of the sale of the estate's property.

Its not a quick process either. It generally takes a few months.

You can go to avvo.com and ask a legal question for free. Ask about the cost for probating an estate and if the probate attorney fees can be taken from the proceeds of the sale of the estate's assets.

The attorney for the estate handles the probate process for the estate. There is no cost to you as the investor. Any costs associated with the estate are managed by the estate.

Your out of pocket costs for this deal should be zero especially if you are simply assigning the contract.

The deal looks good.... if your repair cost and ARV numbers are corrects I could easily see you market this for @25K to your buyers.

The issues arise if your numbers are off. Since you already have it under contract you should have your buyers look at it and let them give you a price.

They might come back with a 30K repair estimate or maybe a 20K repair estimate.

Once they tell you what price they are willing to pay, you can adjust your sales price accordingly.