All Forum Posts by: Darwin Crawford

maxmyinterest.com

look into mini splits for the house.  they are $750/each with free shipping on amazon, and are much more efficient in terms of power.   They work very well in hot climates, and most HVAC techs are pretty familiar with them at this point.  They are also a lot cheaper than the large cumbersome central HVAC systems.

@Jeff Lipple - thanks for the feedback.  I'm still just the Acquisitions manager by day, and growing my rental portfolio by nights.  I like wholesaling with a big team, but wouldn't want to mess with it on my own, too much work.  Where I live, it'd be half the work and twice the money to get my agent's license vs. wholesaler on my own.   I just really don't like entitled, mid-level retail buyers on a personal level.  

However, with systems, a good team, and some hustle, (and a good laptop) this is a great job that I can do from just about anywhere with wifi and cell signal.  

@William Allen - I do agree with you, and normally, wouldn't go around someone.  However, i gave this guy about 8 chances, and this isn't a wholesale deal - its a me deal, and when I'm bankrolling something, I want results.  

We (at work) have had plenty of deals snaked, and a few come back to us, because we are upfront at the beginning.  

I appreciate you reading into this a little - I was typing on my laptop from the porch this morning, and didn't want to seem too verbose, but I felt like this needed sharing.  

@David Dachtera - amen brother.  Full Disclosure is a beautiful thing.  

I've had horrible luck with tenants and landscaping.  If your property is in phoenix, you are just silly to think that they will handled it.  Landscapers in the valley are everywhere, and super cheap.  I have one, he has a truck, takes venmo, and uses his iphone to text me a picture of the yard every time he goes.  

On a 100-unit building, (don't have one...yet) I've read that the big guys use automation to their advantage.  Chart and predict on the small stuff, replace plumbing cartridges (what leaks) on a semi-regular basis and you don't get the 3am calls or the water damage.  

Electrical should be upgraded to LED fixtures, which use very little power, don't use bulbs, and last for about 6 years of straight use before dying.  They're also available on amazon for stupidly cheap.  

Appliances - get with a local appliance repair shop, and put yourself on a rotating schedule for maintenance, and just make it happen.  

Fire sprinklers need periodic service, buildings should be pressure washed yearly, and parking lots re-striped on a semi-annual basis, which should include painting the parking stops.  

I'm not a fan at all of home depot.  Find the nearest Ace Hardware to your property and go introduce yourself to the manager.  They have "commercial accounts" and are usually way more knowledgable, and nicer.  

This is a personal quirk, but most are also locally owned, and I like to support local business.  Home depot in phoenix is the worst.  

Lowes (at least here in Scottsdale) I've been really happy with.  

If you're into multi-family, the cheap junk they sell at the box stores isn't going to hold up to your tenants.  More expensive is fixable, cheaper junk you have to replace.  

you can afford to make a good choice, so do it.  

tax lien laws vary a lot between states, you'll have to look it up on the county website where your property is.  Most places sell them after a year or so.  

tax lien was dirt cheap, as are the taxes in small-town mississippi.  

I had a similar place in Mississippi, and waited until someone had bought the tax lien on it, then looked them up, explained what was what, and told them I'd sign a quitclaim for $500 cash.  

haven't looked back since.  

Hi Everyone,

Wanted to put this out there for some knowledge, feedback, and to share with some of the other wholesalers out there that honesty really is the best thing you can bring to the business.  This following story is entirely true, the names are fictitious.  

My relationship with wholesalers started out, for lack of a better word, horribly.  I was a brand new investor, and got sold a wholesale deal by an attractive woman "agent" with no meat on the bone.  Whose fault is that?  Mine entirely.  However, I learned a lot about what a wholesale deal was, and vowed to avoid them at all costs.  

18 months later, I'm no longer flipping, but enjoying the cashflow from my 4 rentals, humming along, and run into a larger wholesale outfit, which offered me a full time job. Since I need to prove income to buy my next MFH investment, I said sure.  The first thing I realized is that this is a cowboy, wild-west industry, and has some very professional, and very unprofessional people in it.  I am fortunate to work for one of the very professional outfits, and explain to ALL our sellers what is going on.  

Now - the present.  Through a work connection, I stumbled onto a MFH investment that I liked.  Numbers are good, located in a landlord friendly state, and the wholesale price is more or less where I wanted it.  So I called him up.  I'm big on picking up the phone and talking to people.  I think its why we succeed where others fail.  

During the course of the phone call, where I explained to this wholesaler who I am, and what i do for a living, and respect the fact that he has to get paid, I find out this is one of these low-level daisy chain deals.  Anyone in the game knows what I'm talking about.  Daisy chain deals suck.  There is about 489 ways for them to go wrong, 51 ways to have a miscommunication, and about 1 way for it to go right.  Sheesh.  

Another round of phone calls later, and I get to the wholesaler who actually has the contract.  We'll call him Bob.  (no, his name is not bob). After I reached out via phone, text, and email, he responded to my request for the contract and assignment with "I don't want to give it to you without a $2K deposit".  Via Text Message.  (Cue annoyed face here).  I don't know how anyone else here works, but we as a company, and myself as an investor, are really, really upfront with everyone involved about who does what and who is getting paid.  

So sorry, Bob the wholesaler, but I need a contract and assignment.  Sure, I'll send proof of funds, no problem.  He insists on me sending money without any type of paperwork.  Here is where it gets interesting.  

the company that I work for has some pretty sweet databases for finding people.  I did a good amount of skip tracing before I came to work for them, so finding people is pretty easy.  I communicate this to the wholesaler, and tell him that if he won't give me the contract, I'll just call the seller up, explain who I am, and let the seller know I'm happy to pay the assignment fee.  

"You can't do that" is the response I get.  So naturally, after briefing my superiors and getting the green light, I did it.  Looped the seller, wholesaler, (both of them) and myself into a group email, and laid it all out on the table.  Who was doing what, who was getting paid, and why I (the end buyer with the money) was all OK with it.   I got the contract from the original seller, figured the markup (which was absurdly high, even for wholesaling) and just laid it all out there. 

Turns out the seller was a nice, older, active-duty military man who had no idea what he signed, and has been getting strung along for over 60 days due to "title issues" (the title is clean - I paid to have it checked).  

What ensued after was one of the more embarrassing phone calls of my life to listen to.  The poor wholesaler, who had told the seller the whole time that he was buying it, is brand new to the game, and spend about 20 minutes screaming at me on the phone (most of it I put on mute, and just ignored - screaming happens...) at which point I explained to him that all I did was put everyone on the same page, as we should have done at the start.  At this point, he hung up on me,  and sent me a poorly worded, very threatening email (which I actually printed and keep on the wall by my desk for laughs) instructing me to get "better at lying", "get a lot of fake email addresses" and "I'll never last in this game". 

Guys/Gals - this poor dude hasn't closed a deal in his life.  I checked.  I've been involved in 50+ and counting, and they close.  The seller of this property contacted me and said he got the same berating, and will be in touch after the contract expires.   Some might argue I cut this guy out of the deal, I'd argue that he shouldn't have had the deal in the first place if he's going to act like he did.  

I'm sharing this partly to vent, and partly to illustrate a point.  I had a very, very bad intro to wholesaling.  I got into the industry, and have had a good experience thus far, because I make it a point to be UPFRONT, and HONEST with everyone involved about what's going on.  We are a large-volume virtual wholesaler, and work with all types of people.  To this day, I have never had a bad experience, (other than trying to buy from wholesalers) by being upfront and honest with both our buyers and sellers.  I let them know we might sell it or keep it, the choice is up to my superiors.  I get told all the time thank you for letting them know. I let them know there might be a few people coming to see the place, and to pick up the phone and call me if there is a problem.  

So, apologies for the long post, but I wanted to share this with the wholesaling community - run a good honest shop, be upfront with people, and the money will follow.  I wish everyone in the business a ton of luck, but I've found what makes the most money is 1) picking up the phone, and 2)being honest with everyone.  Neither works without the other. 

This wholesaler went from a potential $15K fee to zero because he lied, hid things, and wasn't up front with his buyer and seller.  In my book, this is what should happen. 

Any and all feedback is welcome.  Thank you for being a great community. 

@Jon Klaus - this question will no doubt show my lack of knowledge, but what happens if you lose one of your three office tenants?  I'm sure the leases are long and the rents are plentiful, but that seems to me like owning a very large Tri-plex, which can be a problem if 1 of the tenants move out and the numbers aren't there to support it.  Obviously I'm missing something, but would you mind sharing what it is?  

Are the criteria difference for office buildings? Cap rates here for Tier 1 office space are lousy, and there is a lot of it still left from the crash. The smaller stuff goes really quick, but the numbers on it are the same as SFH and financing is a bear to get done - honestly you can make the same money buying $100K condo's around scottsdale and renting them to tech employees.

@Gino Barbaro - the wholesaler gets booted after 8/3/2016, which is the date I gave him to get it done or hit the bricks.  I've been looking for some backup properties if this one falls through, but haven't had a ton of luck. I'll be looking forward to your article, and again, thank you for the book and the posts, they are all very helpful.  

In terms of per-door costs, I'm working on a list, but got pretty discouraged with my local market due to the returns on capital that the big boys seem willing to accept, and thus looked elsewhere.  I'll get it back going, as it varies a LOT from area to area in Phoenix.  This is a very large valley, geographically speaking.