All Forum Posts by: Account Closed

 Please cite it. We have unlicensed wholesalers in MD, some of them well established and doing it for many years, openly and transparently. Show me where it says that you are a Broker in State's eyes if you knock on someone's door and make a cash offer to buy their house as investor or wholesaler who will assign a contract. There might be no trespassing laws in some communities and their numbers could be on DNC list, but you could mail them a yellow letter. Where does it say it's illegal to do so?

 I didn't force you to respond to my comment. This is public forum. You wrote your thoughts I did mine. I responded to your baseless assertions and allegations. And if you have nothing to add then that's perfectly fine. I never force anyone to have a debate or discussion with me. 

 I am not intimidated by tough and loud talk. Long past that stage in my life and know a bit about the real life we live in. At most I can chuckle. 

So, either cite the law or debate is over. 

You can be embarrassed all you want. You are not me. As long as I am honest and transparent with everyone and do what my conscience tells me is right and legal I couldn't care less what others say or think about me. Anyone who doesn't pay my bills has no say in what path I shall choose and walk. 

As to what you wrote above, it's just a wishful thinking, I am a businessman, not a non-profit or charitable organization receiving state grants and donations. No business serves anything other than a simple goal: profit. Of course there is a line that separates legal business from criminal enterprise, but the line is not drawn where you draw it, by alleging and asserting that a businessman must act against his own interests and make idiotic decisions aimed to ruin his own business.

All above said, I am not an evil or malicious person. A lot of people will write books or run podcasts saying how much they care about others, and then turn around and plunge a knife or take whatever backhanded, deceitful action they can to profit. I am not one of those people and I distrust anyone who preaches morals from high soap box. But if I come across a person that I think is sincere and is in dire need of help, I might help (without making any noise and letting anyone know). Not for profit but simply because it makes me feel good to make others feel better. Sure, I will try to help and solve seller's problems. Many may have debts and hardships that force them to get rid of their house. Too many licensed and Ivy League educated financial managers funneled so much cash into RE market since COVID that property values skyrocketed and as a result tax assessments of properties went through the roof. A lot of people no longer can afford to keep up with higher property taxes and maintenance costs on top of living expenses. I didn't do anything to put the sellers in such distress, policy makers , politicians and economists did, but if getting cash for their home is going to solve some of their problems then I will be helping them along the way. But at no point I have made myself known as sellers' broker. I don't have fiduciary duties to sellers and I can't afford to buy their homes at ARV value, just so someone like you sings praises to me. My math is simple. The most I can afford to offer (MAO) is 70 to 75% of ARV minus repair costs/closing costs and my assignment fee. Anything above MAO will generate useless piece of paper, a contract that I won't be able to assign to anyone (because investors, I believe, are not idiots, they will not pay ARV for distressed property. Nor HML will lend money to rehab such house). If I pay ARV and own it myself I will be dealing myself a huge loss, I will be stuck with it or forced to liquidate for half of what I paid. It's just the reality. I can't make counterproductive decisions and offer to pay full ARV on dilapidated piece of junk. Why should I or anyone do that?

You may assume people who get into wholesaling business are all fools, and that's ok, you can continue being biased and make wrong assumptions. But it doesn't mean I would live up to your expectations. 

 I will be helping sellers and attempt to solve their problems along the way, but I am serving my interests above all else. My business model is to find wholesale properties for investors, at the price that would make it a viable investment for them. All wishful thinking aside, please cite specific codes, laws and regulations, MD or Federal, which state that when I approach home sellers in my capacity as a business owner (not REA or Broker) I owe them fiduciary duty and that I MUST serve their interests above all. Either cite the existing law or this debate is over. 

 People who have been doing this for 10+ years say they learn something new each day. Being licensed takes 60 days, passing exam and a sponsor. None will make you know everything. You learn as you do. So, no argument there, there are unknowns that I can't know. 

As to wholesaling, if investor's interest are not your concern and you cater to seller (as broker would be motivated to do), how is it going to be a viable investment opportunity for the investor? Every day I see inventory on the market, which is supposedly "wholesale". Why is it sitting there for days, sometime weeks or months, if it's a real wholesale deal? I think a lot of wholesalers get just any inventory and that's the reason it doesn't sell. As a broker you might be motivated to inflate the price of the property, after all your commission depends on the size of the transaction, and with fiduciary duty to seller you will try to get top dollar for distressed home in dire need of rehab. But how is it making for a good, sellable inventory? 

Jay, I will give you that there are a lot of yahoos who do stupid and criminal things. I am for one against it. It's bad for business. It's one thing if you want to screw over someone , steal $10K and disappear into thin air. It's another if you look at it as a sustainable source of income, which what business is. Those yahoos, when they do egregious things, spoil it for everyone and should be caught and prosecuted for crimes they engage in. I am not the one to advocate for nuts and morons. 

As to licensing, professions you listed are all catering to public in some way. Wholesalers don't. Although wholesalers source their product from general population (home owners), they actually cater to investors. Investors are business owners who have to know what they are doing and accept the risks for doing a business for profit. Hence I don't see need for a REA license.

When it comes to sellers, no one stops seller from listing their property with REA or getting it sold through a broker. It's their choice, as adults, to sell it for cash and off the market. And we already have MD Loss Mitigation laws in place which protect most vulnerable, those who are 60+ days past due on the mortgage. Why should State interfere with it any further, increasing the cost of transaction while doing so? We already have MLS where sellers can have REA list their properties and try to get most cash using brokers and REA. Who prevents sellers from doing it?

How many investors you know who buy from MLS , fix & flip or fix and rent? I actually know one, she gets homes on MLS at 1/3 of ARV (really FUBAR homes), spends another 1/3 on rehabbing and then sells for retail to profit. But it's rare model and very risky for the investor. Why? Because she is competing with hundreds of others who are hooked to MLS and pay highest amount to get that property (they are not in hot market and in horrible condition, lots of unnecessary risks involved). She says she has a permanent crew who shows up on time and gets things done for her in 3 months, but this is not how it usually goes. I don't know of other investors who get the job finished in 3 months.. A lot of other investors who go the same path will be burned and stuck under water once it's ready to sell. And they will have to pay all cash for acquisition, HML won't finance those deals that seem fantastic to you as a seller on MLS, because HML has seen hundreds of flips and won't risk to overpay for distressed property in hard to sell area. Should rehabber fail HML wants to make sure they will get their money back in foreclosure, which can't happen if you overpay for the house and give seller more than what the wholesale value of the house is. There is a reason why investors look for properties that are NOT listed on MLS. And there is a reason why HMLs won't fund those deals. Once in a blue moon you can find a unicorn on MLS, but that's not how investor can scale their business. And wholesaling is all about catering to INVESTORS, not REA or Brokers who will get most commission out of the transaction.

It's a wishful thinking. As of this moment there is no such a thing as "fiduciary duty to seller" if you are out there making an offer to property owner as a wholesaler. There are protections under MD Loss Mitigation Laws already afforded to those who are 60 days past due on their loans, and to those who are not capable of comprehending and consenting to sign a contract,  but if you go to an ADULT who owns a home and who is not in pre-foreclosure in MD and has his mental faculties INTACT, then you can make an offer (which should be for the wholesale value minus a fee you will be adding to your assignment agreement), and it's perfectly legal thing to do. It doesn't matter how many brokers and REA feel pained and whine and slander guys who don't have a license yet able to make money off their sweat. Come October 1, 2024 and wholesalers will have to disclose to sellers what exactly they are doing, but that should not be a big deal. However, if 2023 MD HB0301 [ https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0301?ys=2023RS ] , which failed miserably that same year, gets reintroduced and passes into law in 2025 then I hope to see lots of lawsuits challenging MD on it. It doesn't ban wholesaling per se. It bans anyone , including home owners and flippers, even buyers and renters and individuals engaging in buying, selling, offering to buy or sell any real estate in excess of one per year, unless they have REA license. It's such a brazen , communist and fascist overreach by state that it must surely be taken to court if it becomes a law next year. Then Plaintiffs shall ask for permanent injunction until after the merits of the case are decided by courts. I won't be surprised if it passes and becomes a law, after all US is steadily and progressively plunging itself into a lawless, Orwellian, Third World Country status lately. But surely those who goad the country and states to an abyss should be challenged in courts of law, the last resort of Citizenry to bring grievances and ask for righting the wrong. 

I wrote earlier that if wholesaling works out for me in MD (I will have at least 1 year to try it and see where it goes) , I will get a REA license. It takes 60 hours class, an exam and sponsorship from local REA. I just don't see how adding bureaucracy , burden of state and board regulations and adding costs to each transaction will benefit the business. After all this is not retail business, it's mean to find and supply cheap properties to investors many of whom rely on HML to finance the project. Someone will pay for this and it will be sellers who will get less for their property and retail buyers who will pay more for after repair house. And all this could be handled with existing laws in the books.

 Good for you, I am doing the same. But it's not federal law, it's MD Bill which didn't pass in 2023. Could be reintroduced in future. Not a law yet.