Originally posted by @Greg H.:
Originally posted by @Dallas Trufyn:
Wow, two people make quick, easy money and one of them is supposed to be wrong?? Mind boggling to me...
When I had my bookstore and I sold books at retail, even though I paid wholesale price to buy them. This wasn't disclosed to every customer that walked through the door. I must have done something wrong?
No one has an issue with your scenario as that is how business operates. However the scenario presented by the OP is similar to this:
You have a bookstore and you are perceived to be an expert in your field. You additionally offer a service to appraise people's book collections for a fee. Mr Smith brings in his collection of books as he is in need of money and needs to sell his books asap. After your review, you appraise his collection at $2000 knowing that the book collection could easily bring $18,000. Mr Smith, needing the money, sells his collection to you for $2000 and you proceed to turn around and sell the collection for $18,000. Wouldn't we all have an issue with this ?
Well, I guess it depends whether Mr. Smith has done his Due Diligence then?
Your over complicating the story. Generally, an appraiser is not a retailer. Mr. Smith would first take the book to an appraiser. An appraiser has a moral and LEGAL obligation to find the fair market value of the book, car, coin, house, widget, etc. The appraiser does not buy the book. He gives it back to Mr. Smith, who in turn, can sell it to whoever he wants. He can sell it at a flea market, online, EBay or a pawn shop. Mr. Smith is desperate to sell the book to pay off Child Support liens. He goes to the pawn shop....
Had Mr. Smith NOT had the appraisal done, the pawn shop would have been very happy to tell him what the book is 'worth' (you see where I am going). Is the pawn shop set up legally as an appraiser? No they are not. If the pawn shop told him it's worth $2000, he has a choice to make. There is no gun to his head.
Just like in the OP. The seller had every legal right to NOT sell the property to the wholesaler, get a professional appraisal done, list it with an agent and get the $16000. Obviously the buyer would not have got a deal, so he loses.
I recently bought a 78 Trans Am Y88 Gold Bird. Oh, I buy and sell cars (I have to be careful sharing any of my success stories though...apparently there is a 'cap' on how much money a person can profit). I gave the seller (original owners) what they wanted (although they could have take it to a dealership). I had the car professionally appraised. No, the appraiser did NOT buy my car (it's called Conflict of Interest...a VERY legal term). I then sold the car to an overseas collector in Kuwait. He got a really good deal and was happy. Kind of a win, win, win. Did I do anything illegal? Nope. Do I fell guilty? Nope. Did everyone get what they wanted? Yep
To all of you who are new to Real Estate Investing, and may be following this thread, don't be discouraged by haters and naysayers. Having owned and sold many different types of businesses over the years, I've always had people there to discourage, complain, deflate and just want to wreck your every day pursuit of trying to rise above. Now, in all fairness, there are genuine concerns that have been brought up. There has to be checks and balances. One trick, learn to differentiate, fact from opinion...huge difference.
However, above all that...do it properly! Do not lie, cheat, steal or break the law. Many of us have put in much time, study, effort and money to invest in RE the right way. There does not seem to be anything illegitimate done in the OP and wholesale deals and RE transactions happen everyday across the country...legally. Of course, there are bad apples in every applecart. Throw them in the garbage and keep moving on. Bigger Pockets is a great venue to learn to from successes (and honest failures). Whether you bird dog, wholesale, flip, loan or rent out, do it well and keep striving for your goals!
