All Forum Posts by: Account Closed

I wrote off a seller lead as he couldn't do terms on his house even though he was open to the idea. He said he was in his second year of his three years to save on taxes. He said he had to move back into his house so it wouldn't default on him. I didnt pry further but as I was driving home I thought maybe there was something more there that I could of worked with. Does anyone know of what he is talking about and if a contract to sell his house would extend whatever he was talking about until the closing date? thanks

Does anyone know if homeowners insurance will cover a T-locking roof? Or am I going to have to replace it or have issues with a homeowners inspection? thanks. 

Steve, good one! ;) that did make me chuckle. I'll admit I wrote the first post with my emotions only bc it was a deal i had lost to someone else. I was going to delete/edit the first post but i'm leaving it alone. Im going to take my verbal lashings with a grin. Maybe people are doing this maybe they're not but i'm going to be bringing it up to homeowners now on what to look out for. Again, not the best written stuff. 

Michael, funny you said that bc here is a quote from that article, "They also gave him a lot of documents to sign. One was a notice of their intent to half the foreclosure." No idea what intent to half the foreclosure means. 

And i now know that I need to learn how to write better. I better add that to my 10x goals. (subtle humor injected into the post.)

Yes. Very confusing Anson. While I was writing it and trying to understand it myself. I called the 5k an earnest money and the 12k a promissory note because I was trying to make sense of what they might have said to the homeowner. It just happened to look like a company here in Denver was giving money to a homeowner and promising more money after they sold it for more money. "auctioning"  Wholesale back door dealing? who knows. I'm not making claims against that company and I thought I'd post here to see if anyone has seen or done something of that nature. Lets just say your spider senses are correct. 

Thank you guys for your feed back! I rambled a lot in the post and made it long. Sorry. I Meant for the post to become a what would you do if you ran into this kind of thing and how would you overcome it when dealing with a homeowner. 

It's like when an investor offers a higher price on the house with the intent to negotiate a lower price after the contract is signed. Easy way to overcome that is bring it up and make the homeowner aware of it. 

The main post is another tactic used. Did I explain it 100% right? probably not. I'm putting 2 and 2 together. I looked up previous houses i made offers on, and didn't get, to see what the final price was that sealed that deal. I looked up one of the LLC names in a google search and one of their deals backfired and went to court. And it basically stated: investor gave homeowner 5k, promised 12k after they sold it. investor told owner they were basically auctioning off the house. The house i looked up showed a purchase price of 0$ to one LLC name. Then same day sold to another LLC name for 0$. I can only assume that was a double close. So yes, I made up a lot of the story as fill in on a hypothetical deal. Has anyone done this before or ran into it in their market. And any ideas on how to overcome this tactic when presenting with the homeowner. I hope that better explains it.

Sorry if this doesn't make sense as I'am still trying to wrap my head around this. 

a house goes into pre-foreclosure, probate, etc(motivated to sell) and is met by a real estate investor. Investor gives the homeowner 5000$ and agrees to pay homeowner more money after the "auctioning" of the house. Lets say an additional 12,000$ after another sale of the house to another investor. Investor gets the homeowner to agree to a contract with the investor. Investor explains that they will basically "auction" off the house to the highest bidder and give another payout up to 12,000$ to the homeowner, Depending on the final sale of the price. 

So this is what I see: 

Wholesaler gives an earnest money deposit of 5K directly to homeowner. Then lets the homeowner know that they in turn are going to sell the house to the highest bidder of cash investors they know that would want the house. Then tells them they will give them an additional 12k after they close on the house(promissory note of 12k, with lets say a 60 day contract, plenty of time to shop the deal. And a 60 day inspection.) 

Now I am assuming the first contract was 5k above the payoff amount including back payments, lawyers fees, etc. And written as an earnest money deposit made to the homeowner. Lets say the investor and homeowner agrees to an additional payment of up to 12K depending on the final winning bid. Write out a promissory note for 12k, again I'm assuming here. And then when there is an investor willing to pay a certain amount write out another purchase contract between the original investor and the investor willing to pay the highest amount for it. ( if they can't get a high enough bid, re-negotiate the promissory note and have title amend the contract to new agreed upon price as a last ditch effort) 

Because the wholesale deal is a double close with a quit claim deed, no one knows what the prices were so no one is the wiser, kind of thing. As long as the homeowner gets their 12k payout on the promissory note. the investor is able to tell the homeowner we received the highest bid and will close on this day.( And if the homeowner asks what the investor made, investor can say a small enough amount for the homeowner to be ok with or what ever the moral compass is of that individual. ) Wholesaler collects the difference between the prices. 

This way of wholesaling is combining wholetaling in a sense, as long as your buyers list is big enough to support it i guess. Your getting the highest bidder to agree to pay cash for the property. You have the homeowner on your side, depending on the words you used, homeowner thinks your going to get the highest price for them. (again, moral compass kind of thing) You really don't have to worry about other investors because of the 5k hook you sunk into the homeowner. You dont have to list it on the MLS and pay fees. You're getting the highest price, depending on how big your buyers list is. Or just call around to previous cash prices on houses and pitch the deal that way. You kind of limit the investors who need to go to see the house with todays apps and technology and reserve making house trips for final bids kind of thing.

I filled a lot of this in, like calling the 5k an earnest money deposit and the 12k a promissory note, bc i think that would be the likeliest thing that the investor would call it if anything came out. In writing this i think i answered my own questions about this and it may end up falling into a moral thing for investors. Currently I am against this bc i sense the investors using this are leading the owner to believe they have the owners best interest and will get the best price for them. Why cover up the prices? why do a double close and not an assignment if the homeowner is on board with what you've said. 

Just like with other strategies i hear of, I'm going to come up with ways to overcome them while I'm with the homeowner making my own pitch for the lowest price. 

I would love bigger pockets to put your feed back on here and thoughts about it. I believe I'm going to have a hard time overcoming this strategy if faced by another investor making a pitch on the same house. Maybe this will become just another tool in the tool belt, it may be too soon to tell. I hope this generates a lot of feed back and leave your opinion of it. Thanks for reading if you made it this far. 

@barber long, I am confused as to how you're trying to wholesale these deals and why do you have a realtor showing your deals to another investor? Are you attempting to wholesale the MLS? I don't understand where the realtor comes in handy unless you purchased and closed the property and put it back on the MLS at a higher price. Which if you did you don't have to worry about getting a purchase agreement before you show the house to anyone. How ever your trying to get paid off of these deals, wouldn't an assignment or a double close be easier? I'd love to hear why your using a realtor and why. Good luck selling your deals tho.

I had a question about cold calling and it may be better to contact an attorney but I thought some insight might be found here. For people on the DNC list I'm assuming its to not sell or pitch a product or service. Im calling and asking/telling them that I buy houses and ask them if they have a house for sale. Should I be concerned with the DNC list and reference it? I don't see a difference between calling and sending a yellow letter or postcard to them to see if they have a house they might be willing to sell. Thanks for your feedback. 

OK....so about the complaining...I'm sorry.....Ive dedicating a lot to memorizing scripts and presetations. I can spout them off with out any problem and say them in a way that would make most sales coaches happy. I just found out that a lost contract of a preforclsosure deal was getting door knocked constantly for 2 weeks and up to midnight of most days. They put up a sign that read, "Solicitors between 8am-8pm" And worst cast up until midnight the last week going up to the auction date. The house was of a close friends mother in law that he recently got into a "family altercation" and I lost my edge in being in the mix of getting the deal. Since I know the extent of repairs needed to bring up to rent or flip....I was way out bided.. by a lot! I pride my self in knowing negotiations tactics and presentations. Right now it doesn't matter with soo many people trying to get into wholesaling in my market. They are driving prices way way way way way up. Worst I've seen is 84% of ARV. I can get contracts to 50-60% of the ARV but not get them to stick. they have 3 days to cancel no matter what. Ive seen yellow letters that read the investor will guarantee 5k over the highest offer....dealing with one now..... 3 months ago my market started HGTV ads for houses for flippers to work with them and blah blah blah....how do I go about a hot market and a lot of new investors? I read that some investors get the contract at 80% of ARV and work backwards to the price they want. I don't like the strategy but i'm thinking that might be the only way right now....please leave your 2 cents!