All Forum Posts by: Eric F.

After 4 pages of people with 5 posts saying it changed their lives I was ready to write it off but @Curt Smith is the real deal in my eyes. If he says it is good stuff I believe it. I'm going to give it a try. Even if it does turn out to be terrible I've burned way more than 49 dollars on way dumber stuff in real estate, that is for sure.

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He probably does not remember it, but years ago I reached out to him and he gave me some great advice on a niche form of real estate investing, which is why I am saying if it is good enough for him it should be good enough for me. 

@Andrew S. Not really, but I was doing them in parks. Lot rent in our area is so expensive now it is hard to make it work.

 This is probably the first time I have come on this site in 6 months.  @Uriah D. I sent you an e-mail but I would be happy to look at any trailer leads are not interested in.

-Eric

 Was this directed at me? I bought it, spent 3 days cleaning it out, listed it, and accepted a full asking price offer, cash, 48 hours after listing it, closed it two weeks later, and made more than I have on any other deal to this date (note: in 3 weeks this statement will no longer be true)

This is an aspect of my business I really need to optimize. For Lowes I just use the Business Account. 5% off everything (yes I know I can buy ebay 10% coupons and I sometimes do), PO tracking, etc. I can probably replicate all this with a My Lowes card and save more using a Discover card (the next 2 months) or stacking a rewards card with coupons.

@Kiet N. makes it sound like Discover has it going on right now. I think I still have a Discover card. I paid it off and quit using it years ago. I will have to check .

I looked into optimizing my credit cards about a year ago but I do not want a card in my personal name to use for business spending (and 80% of what I spend is business).  I had trouble finding a card I could have as a company card with equivalent rewards to a personal card.

Another problem is the easiest information to find out about wholesaling is bad information. 2 months ago my local REIA, which is where BP tells every new investor to go, had a guru come through and they said 5 things I know for sure are illegal in my state, and a few more things which might have been illegal but I am not positive. (this was not a wholesaling presentation, but still). Anyways, the "new" wholesaler first learns to say "I work with a large group of investors" even though they do not know any investors, they learn to put "subject to partner's approval" in a contract even though they do not have a LLC, much less a partner. They learn to get it under contract and post it on craigslist and e-mail 400 people they have no reputation with to sell the deal. They learn to lie to the seller about all types of tiny stuff you don't even need to lie about. For example, people seem to be under the impression the seller should not think you are going to make a profit. That is stupid. Do they think you spent money to send them a postcard, drove there, and are buying their house to lose money? Of course not, so don't pretend you are.

Basically everything they learn at first is bad information, some of it is borderline unethical (or flat out unethical) and some of it may even not be legal depending on their jurisdiction. Furthermore, a new wholesaler is first taught to lie, even when it doesn't help (note: It never helps to lie to a seller).

Additionally, I don't care what a guru says, it takes money for marketing and time to get a few deals. Most people quit before they get a deal and even if someone does one or two they then give up. I would be shocked if 5% of people who decide "they are going to become a wholesaler" do 5 deals, and I would be super shocked if 5% of people who try to do it ever get to the point they support themselves full time as a real estate investor (either wholesaling or wholesaling + rehabbing and being a landlord). 

If I had to guess there are probably 10 thousand threads in the starting out forum along the lines of "I am X in Y city and want to be a wholesaler" yet there are 10 thousand threads about how there are no good wholesalers.  I just randomly went back to posts over 2 years old in the new members forum, clicked on 10, and if I had to guess 0 of them are still in this business. Of course I can't tell for sure but none of them had more than 10 posts or a post in the last year. This is a high failure business.

All the online companies are about the same. I don't use bandit signs anymore because I have never had luck with them. I always used Dirt Cheap Signs, but people I know have ordered from multiple vendors and there is no difference. The price and quality are all pretty much the same. I bet if I ordered the same design from 5 vendors I could not tell the difference. 

For the GCs, learn to budget yourself and maybe just get 1 out to double check. And if you buy it use the GC. Or you can pay them to give you an estimate if you want. Personally, through rehabbing experience I am pretty comfortable estimating costs myself, and I have my main guy give me a double check, but since I hire him all the time he is more than happy to come out to a property and walk through it with me. What I do is come up with my own number first, then have him come up with an independent one, then we share and decide where our differences are. Being able to estimate costs comes from experience of course and my guy wouldn't drive out to give me an estimate if I did not have a track record of hiring him (and paying FAST)

First of all, I usually close myself. Usually at some point the seller asks what you want to do with the property. If you might wholesale it say something like "I plan on buying it, but a guy I work with might close instead, is that OK?" The seller will almost never care. This one sentence can save a lot of trouble down the road. Anyways, short answer, I basically tell them I might wholesale it but I put it in terms they understand. If you start explaining wholesaling, assigning contracts etc you will just confuse them.  Note: I do plan on buying it myself so I am not lying. I understand most wholesalers do not intend to close themselves. Occasionally I might wholesale/assign a deal but I never sign a deal I wouldn't close on. 

To be honest, I think every wholesaler should inform the seller they might flip the contract. 1) It is usually true and 2) If you are going to post it on craigslist or whatever you should assume the seller will find out. 3) The seller will almost never care.

The way wholesaling is taught by gurus includes a lot of lying just to lie. Almost none of the lies they tell you to use are necessary. "I work with a large group of investors blablabla." No you don't...you have a single member LLC if that! "I pay cash and close quickly." Most don't (I actually do quite often but I still don't say this usually).

Bottom line the seller cares about 2 things. 1) You close. 2) They get paid what you said they would. 

 You are not going to, period. In a hypothetical world where one of those became available in Raleigh it will be sold way before someone in California hears about it. @Chris Martin probably knows as much about Raleigh as anyone in the world, and certainly who posts on Biggerpockets regularly. When he says something I listen.

By the way, I don't want to give the impression I am attacking you. I am glad you shared a potential failure to learn from. At first most of us feel the need to be dishonest with the seller because that is how wholesaling is taught. When I first started, I went to my REIA, as Biggerpockets recommended, and the guy in charge of the beginner group taught us about weasel clauses, posting on craigslist, bringing in buyers as inspectors, etc. How would I know any better? Biggerpockets told me to go to my REIA and the guy there is supposedly an expert. He was not even a guru. He was just a local guy who did business here.

You learned a valuable lesson. This entire business is built on trust. The seller has to trust you that you will close. I could have 2 million in the bank to buy a house, but if the seller does not believe me then it does not matter.