All Forum Posts by: Chuck Catchings

Anthony, I have read through all the replies and none have mentioned working with a full turn key wholesaler. Now I am talking out of your area and most likely out of state where prices are much, much cheaper. Oh and that trust word is optimal because your going to get a lot of pros and cons to investing out of your area or state here on BP. 

It's hard for people that live in high end areas to believe there are still properties that can be bought for that $10K that you have saved. I have a friend that's a wholesaler and he's been doing exactly this for the last couple of years in the St. Louis, Mo. area.

So if your interested I can help, I do have over 30 years background in all phases of SFR and multifamily construction. Good luck.

Chuck

I need some feedback on a potential wholesale deal scenario. This is NOT an offer just a question.

1. Say I have a property in one of Austins hottest neighborhoods listed around $325K.

2. Let's say the rehab cost would be in the $50K range.

3. From a good source they say this house could sell for as much as $475K to $500K this spring. This same source also said that in the last 90 days 76 homes in this area sold for an average of $425K.

     I know this sounds like a good deal but I need some feedback from buyers that buy these types of properties. I hope I'm not breaking the rules here but this is a question not an offer, just need some feedback if possible, thanks.

   Here's my take on this and I have not really seen anyone comment on this process here on BP but it's working for me. Become a facilitator, in other words you hook up deal makers and you can make 6+ figures just in referral fees or commissions per deal. Sure you need to know something about whatever market your working in but your certainly don't need an Ivy league education not to mention the cost of that education to make this kind of $$. I never went to college but I did work in the construction trades for over 30 years. Let me give you a few examples of deals that I'm currently working on and then you can make your own conclusion if this would work for you:

1. I introduced a developer on a hotel project looking for $10M with a lender. My fee is 3% determined by the developer. Loan is scheduled to close in September so that's $300K.

2. Same developer on a $125M project in the Bakken oil fields in N. Dakota. I have 2 potential lenders interested in this project and we're having conference calls with principles later this week. Minimum fee on this will be 1% so there's another potential $1.25M. The overall development is proposed at $1.3B(yes that is BILLION) so if I even get 1/2% on average for this one project that is a potential $6M+ income over the next few years.

3. Yes I also do smaller deals with wholesalers and investors looking for buy to rent or hold properties. Average fee is from $500 to $1000 per deal closed. So far my closing ratio is 100% because my buyer gets an average of 20%+ on their deals. These are full turn key deals and usually range from $25K and up, cash preferable.

4. Also working with a national lease option to buy firm that I send multiple wholesale properties to so they can blast them out to their national buyers/investor list. This is a new venture but shows much promise for the long run.

       So what does it COST me to do all this other than time and patience? A big fat ZERO out of pocket expenses other than my cell and Internet cost which I would have anyway.

1. Am I an expert in commercial real estate? NO

2. Am I an expert in commercial real estate lending? NO, not even close.

3. Am I an expert in multimillion dollar development projects like hotels, shopping centers, oil & gas projects, apartment complexes? NO

         Trust me there a lot of people here on BP that are way smarter than me but BP is a great place to network and meet good people. There are tons of opportunities here, be creative, learn, talk to people. It is a process so don't be in a rush.
        

         This is all about networking, networking, networking. Being honest and hopefully have at least some common sense. All you need to do is think BIG and go for it. The deals are out there, it's interesting, can be fun and you will learn a lot.  Good luck, I hope this gives some of you a new path to think about, it does work.

Chuck

Daniel, yep, BP is a great real estate forum, the best actually. Curt gave you the same advise that I would give someone in your position, full turn key. I have worked with several full turn key wholesalers and in my opinion I wouldn't do it any other way. So if you need some encouragement or help just shoot me a PM or hook up here on BP. There are a lot of opportunities out there, you just need to be comfortable with the people your going to have to work with or through. Let's hook up.

Chuck

I'd like to chime in on the buy Chinese topic. This is done everyday all day long. I have a 5 year background in the physical commodities business. One of my good friends actually went into the monument business and all his monuments, granite slabs etc come from China. Setting this up is not hard, you just have to start up a trading company, understand all the infrastructure, terminology etc. It's probably easier to get trade funding than a loan from a bank for real estate.

The main issue I see with this idea is that you would have to set up a warehouse in a central location which maybe isn't that hard to do but shipping cost will be the killer. Shipping cost here in the US is crazy but again I'm sure this could be worked out as well. Look this isn't a new concept or idea for that matter. I would venture to say it's already being done so that may be the way to go and get a discount from an already established warehouse, worth looking into none the less.

By the way how many people are on BP now? Seems that BP could carry some weight here with all these people coming on here on a daily basis. I tell anyone and everyone that it's the best bar none RE forum.

I'd like to add my 2 cents to this discussion coming from a past contractor. I have gone to so many RE investor meetings and be the only contractor in sight. It amazed me the number of new investors that never got estimates from a qualified contractor prior to buying a property, just made NO sense to me at all. Unfortunately in a lot of areas contractors do not have to be licensed and anyone can hang a hammer and call themselves a contractor.

This leads to the issue of vetting out your contractor which again most people never do. Or the contractor gives you phone numbers of friends and family for you to call for references. So this has to be addressed first and foremost up front. I never had to advertize and all my work came by word of mouth. I always gave people pics or addresses to go check out my work. There really should be no issue finding well established contractors in any area to work with. It's the fly by nighters that you have to be careful with.

Personally I think this is a great idea, Joshua, to do here on BP. One thing that I offered to do for investors was to do a complete bid process to cover all cost and expenses. I did this for a small fee and if I got the job I just rolled it into the contract. It's not always the best idea to take the lowest bidder, it usually cost you more in the long run.

I would be very interested in working with someone on this concept. I think it would be or could be a very valuable asset or service here on BP. I mean why not, isn't this what most everyone on here is looking to do, buy and invest no matter the level. The gears are turning as I write this. Please keep me posted about this subject if someone here on BP decides to take this to the next level.

Thanks

Chuck

Dimitri here's my take on this subject but everyone that has posted here has been pretty much spot on so as usual you generally get get advise or responses to your questions here on BP.

With that said I'm just going to give you my 2 cents from a virtual wholesalers point of view. Wholesalers are not hard to find but you need to know exactly what your looking for and what they are providing. I generally only work with full turn key wholesalers that actually buy their properties, rehab them and in a lot of cases have in house PM or access to. They also will give you local rental market rates to give you a good idea of what sort of returns that you will get. If they don't already have the property rented for the buyer.

If your not looking to do buy to rent or hold then in reality your going to have a hard time getting an established wholesaler to sell you property at a steep discount because they don't have to.

To address your question about EMDs, some wholesalers do require a non refundable deposit but not all. Typically it's the more established ones that do. These wholesalers will not give you terms and a lot of time will not allow you to reassign the contract. Again they don't have to, they already have established buyers and know which ones will buy what.

The other thing that I think you need to consider here is that your in a hot RE market there in the Bay area and also just the cost of properties there will eliminate most buyers from your market. This is pretty much the same in any hot market. Sure you may stumble onto a good deal every once in a while but you have to Johnny on the spot with CASH in hand to get these deals. Any good to decent market is going to have a ton of investors already established looking for or at the same deal or deals that your looking at.

I'm sure I left out some important items here but I hope this helps you see the bigger picture. Also sorry for the long post, so good luck in your ventures and if I can help just shoot me a message.

Chuck

James & Patrick:

Your picking a tough market to do what your doing especially if your just starting out. I have some guys there that do bird dogging and are real good at it. I can see what they're up too if you like. Look in Craigslist under meet up groups, you may find a RE group there. There are much better areas than Austin to do what you're doing, San Antonio for one and it's a lot cheaper. Good luck, shoot me a message if you interested in the bird dogs.

Just call your local scrap yard, they will be able to tell if it's worth messing with. If it is they should know who to call. Problem is there is a lot of different material. Doing this kind of work is labor intensive plus a lot of up front cost. Good luck.

Sorry Dennis I had to reply. Sounds like you just want to go to Vegas and using this as an excuse. Why would you go looking for investment property if you weren't already pre approved? Why don't you ask that realtor and see what she has to say about that??