All Forum Posts by: Ryan Johnston

Make sure they have proper GL insurance (when I checked they didn't and owner knew it and told me to find a new company). Call the carrier and make sure it covers foundation or plumbing. Also make sure you get an engineer to prescribe the work and check the work, pre and post elevations, GL COI, and full bids and invoices with all the work to be and that was performed, warranty paperwork. I am now VERY sorry my GC didn't take care of these things.

@Mitch Messer That's very interesting. We have our business accounts at WF, and they said it doesn't make a difference. Before you made the ATM deposit, did you go into the branch and furnish the POA, or just deposit and only furnish the docs if they ask for it?

@Mitch Messer thanks. We have spoken to a couple banks, including Wells Fargo where we bank, and they have advised that they will not accept a power of attorney for receiving funds made out to another person. Basically, as we worked it up the food chain, we were told that the bank never wants to be in the middle of a dispute regarding the legitimacy of a POA. So, trying to figure out how we might work around that, including looking for a different bank…

In a Subject To transaction, how do I handle the seller’s escrow account? In particular, what happens when I am doing a short term purchase, for a flip or wholetail, and I’m going to be crediting my end buyer with taxes but won’t be getting the balance in the escrow account to cover them - as I understand it, that money reverts to the name on the loan, that is, the original seller.

I’m sure I’ve got my logic mixed up somewhere - could someone shed some insight on that?

Just want to jump in on this. I don't mean to sound snarky, but I hope none of those attacking quality coaching programs ever parted with tens of thousands of your dollars to go to college... I know that my ROI on my college education is far less than that of the average Wholesaling Inc student...

I joined Wholesaling Inc about 18 months ago, having bought several rental properties and looking for a better avenue to source deals for our portfolio.  The Wholesaling Inc program is LEGIT.  Nothing about wholesaling is rocket science - but there is an art to it, and a coaching program is all about shortening learning curves and eliminating mistakes before you make them.  When I started the program it was $5000.  That investment paid for itself fewer than three months later when I closed my first deal, not to mention the savings through their partnership with ListSource.  In the 18 months since I started the program, I've closed enough deals to NET over $160,000, and that is with my doing it VERY part time.  I love my 9 - 5, I have no intention of quitting it, as it's my calling - RE is just a side gig. But my side gig, working just a couple hours a week, is making more than my 50-hour-week job. We've been able to purchase more rental property, and I've got a property closing today and just got another one under contract yesterday. BOOM! My local mentor got her start going through the Wholesaling Inc program, and she is on track to do over $1.5 million in revenue this year, and she started only 4-5 years ago. Results speak for themselves. I'm INCREDIBLY thankful for Tom Krol and the Wholesaling, Inc. team.  My time is valuable to me - I'm married with three kids and a demanding but wonderful job.  I don't have time to curate the best material (and how would I even know what's best???) from the thousands and thousands of posts and forums on wholesaling.  I don't have time to make lots of mistakes, not have a mentor, and spend months/years just figuring it out.  A single deal pays for the program.  I don't understand the aversion to quality coaching.  Yes, there are scams and gurus that are famous for being famous, but all the lead coaches in the program are $1 million+ annual wholesalers.  They have time to teach because they have so successfully scaled their businesses that they run without their daily interaction.  That's where I'm headed next!  And they've already cleared the way and systematized the business.  Why WOULDN'T I capitalize on their experience?

Just a quick aside, the ability to wholesale freely in Texas isn't simply a matter of our getting away with something that authorities have simply chosen to ignore.  In fact, new legislation passed just last September, 2017 clarified the rights of wholesalers to do exactly what I just described.  Here's the relevant verbiage:

Sec. 1101.0045. EQUITABLE INTERESTS IN REAL PROPERTY. 

(a) A person may acquire an option or an interest in a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the contract without holding a license issued under this chapter if the person:

(1) does not use the option or contract to purchase to engage in real estate brokerage; and
(2) discloses the nature of the equitable interest to any potential buyer.

(b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest to a potential buyer is engaging in real estate brokerage.

The key is disclosure, and Texas is (in my opinion) wisely recognizing the benefit that wholesalers bring to communities by clarifying their rights to do business.  

@Brian Pulaski, it's all in the fine print, as it is in so many businesses where the difference between being 100% good and opening oneself to trouble is just a simple disclaimer that clarifies the nature of your proposition. Again, I can only speak for Texas, but there is verbiage (tested by case law, mind you) that we put on all marketing materials that clearly discloses that we are marketing an equitable interest in the property and not the property itself. That said, I still take down the majority of my properties and sell on the MLS. I make more that way, anyway. Nonetheless, I have absolutely no qualms assigning contracts or double-closing when that's the better exit strategy. But I certainly get that you can't do things the same way in other states.

I'll conclude my contribution to the dialogue with this: you are welcome to your perspective on wholesaling and I wish you the best in your ventures. I have had everything I do reviewed by numerous attorneys (including all the contracts I use, all the way down to the verbiage I typically employ when talking to a seller), and I have yet to have any red flags raised. At least in Texas, there's a big difference between marketing real estate and marketing a contract, though the vast majority of my business is purchasing the property outright and flipping it. In our business, we operate within the constraints of the law, partner with licensed realtors when we need to, close with reputable title companies, and operate with integrity. We do not justify our actions because we need to placate our consciences. Our business model is as acceptable as a realtor taking 6% of a home's value for simply listing it on MLS and maybe hosting an open house or two. I know, as I have sold numerous homes through realtors :-) I don't begrudge them for making a living doing real estate, and I don't expect others to begrudge me for the same. As long as we operate within the law, with ethics, honesty and integrity, there are plenty of ways to be successful in this business.

Best of wishes in your niche!

Every deal I've ever done has blessed everyone involved.  If it's not a win for everyone, then I want out of the deal.  I am a full-time pastor, and Real Estate is my side business so that my wife can stay home with our kids.  I operate by the highest standards and take great pride in treating others fairly.  There are three options available to people who sell homes: speed, convenience, and price.  Of the three, a seller can typically choose only two.  Most sellers are most interested in price, but it would be incorrect to assume that EVERYONE is most interested in price. 

Every homeowner I speak to is told four very important things:

1) You should probably list with a realtor, and here's why (and I'll provide Realtor references if you'd like)

2) If you don't want to list, you should probably rent it out

3) If you do choose to do business with me, I will not be able to give you market price for your property, but I will be able to offer speed and convenience.  

4) I may or may not actually be the one to close on your property. I may assign it to another investor for a profit, I may keep it and flip it for a profit, or I may keep it as a rental for cash flow. Are you ok with those scenarios?

Total transparency is the name of the game, and if folks aren't cool with all of that, we shake hands and part amicably. I've never had someone get upset with me for being honest. In fact, on more than one occasion I've been thanked for being so forthright, even though we didn't do a deal.  

The last people whose home I purchased had tried to sell it on the open market but could not because of its condition. Other wholesalers low-balled them and they refused the offers. I offered $20,000 more than the next best offer, additionally helped them negotiate down a $20,000 lien to $6,000, and still made a healthy profit.  The couple literally was in tears at the close because they were so grateful. They knew I was not operating a charity in buying their home - they knew I was going to make money, and they were thrilled for me. In fact, the owner asked me, when I made my offer, if I was sure I would make money at that number.  I could have backpedaled, offered less, and still got the deal, but I stuck to my original offer.

For these homeowners, they were desperate to offload this house, didn't know where to turn, had been mistreated by other wholesalers and sharks, and the offer I made allowed them to move on, clear the books of debt and back taxes, get some much-needed medical work done, and ultimately get a fresh start. 

My church ministers to down-and-out folks in our community.  I have had tenants whose kids have come to our church on the buses we send out into the community to reach these families.  I have a heart for helping people, and ethical wholesaling is, in my opinion, one of the best real estate niches, as it helps people in distress, earns a solid income, and helps revitalize communities one distressed house at a time.

My encouragement to everyone in this business is 

1) Don't judge every wholesaler or wholesaling coach just because there are some unscrupulous operators out there

2) Have a go-giver mindset, that the more you give back, the more you're going to receive (not just monetarily speaking)

3) There are LOTS of ways to make an honest living in RE - wholesaling is one of them

I joined the Wholesaling Inc program in the fall of 2017. Like most BP members, super skeptical of gurus. I have a small portfolio of rentals in Dallas, mostly purchased from good, reputable wholesalers, but I wanted to stop paying the middleman and source the deals myself so I could keep the best and pass on the rest. 

My thoughts after 6 months in the program:

- Worth every penny. What most people will care about is that I have netted over $100,000 that I would never have seen otherwise. Granted, that's probably an unusually high amount compared to most students, but there's no question the program gave me the tools to achieve this.

- The program insists that you have an attorney review everything you do, they inspire you to get out of your comfort zone and achieve success but are fanatical about making sure you stay legal

- They operate by Christian standards, empahsize the discipline of giving back, and inspire us to never sacrifice ethics for success. To me, this is one of the most important features of the system - wholesaling is laden with charlatans and unscrupulous operators.  @Tom Krol and his team are firm believers that the greatest success comes to those who operate by the highest moral standards, and I see that reflected in the program and in the coaches' own RE businesses. 

- Nothing they teach is rocket science. You could definitely figure it out if you spent enough hours on BP, listening to podcasts, and going by trial and error. For the fee they charge, about $5,000, I saved myself countless hours of frustration, mistakes, and missed opportunities, plus I have access to weekly coaching calls and a forum where questions are answered knowledgeably from one of the team's experts within an hour or two. The coaching calls are typically 2-3 hours long and are recorded so if you miss a call, you can listen later. That alone is worth the price - sooooooo much is learned in that forum!

Anyhow, I've seen Tom get a lot of grief on BP and other places. I owe a great debt of gratitude to the program and thought I'd jump in and throw in my two cents for anyone considering getting a coach.