Well, I hear what your saying which is the act of brokering without a license. However, in the US, when a individual signs a purchase and sales agreement with a potential buyer, they have whats called equitable interest.
Brokers essentially represent for another for commission to market and sell their house. When an agents goes into the deal he is hired by buyer or seller to represent the property. The wholesaler, however, has equitable interest in the property and does not represent for another person but rather themselves as investors. Using a loophole within the national Association of realtors called "an assignment transfer". This is essentially you're right as a buyer to sign your rights within reason to buy the priceWithin reason to buy the property for a fee. People are all for thinking about us here. It is not dangerous to open an LLC it made Damn near save your buy! Because nothing you're doing is dangerous it's all legal if you do it right. What I think Jason is referring above is somebody doing it wrong! I have been a real estate agent for over 12 years and I could tell you this I do a lot of business with Wholesaler‘s and there's a lot of good ones out there! In any event a wholesaler does not market or advertise the property itself to Cash Buyer‘s. If he were to do that it would be programmed without a license with which is illegal. Instead the wholesaler advertises in markets the paperwork that the good deal is under. The wholesaler is not marketing the home even though he should have the home and all the other the civics included in his advertisement but he should present his marketing as "I have a deal under contract, "contract for purchase". Wholesaler is merely advertising the paperwork that's for sale. The value to hop in my position as the buyer will be a $5-10,000 fee.
If a foreclosed property, like REO (and for the critics saying that this cannot be done I've done it over 100 times and I never been arrested thrown in jail or thrown to the wolves or at the FBI follow me at night). Now, as I was saying, here's a work around assigning a foreclosure contract that is unassignable. You heard it here first!
Hi all -
Throughout my real estate investing career (~1 month) I've sent out approximately 400 yellow letters and and have done a ton of craigslist advertising. Thus far, however (keep in mind that I've just recently sent out the letters), I've only received 1 motivated seller (his asking is way too high) and a few additional leads that weren't motivated, for a total of 10 leads. Not too shabby, right?
This is only the beginning with me. I'm determined to get my business off the ground.
A bit on myself - I'm currently living in NYC, originally from NJ. I work in finance, which is an extremely demanding job (typically work from 7AM-8PM every day, including some weekend work). With that said, my transportation home to NJ is limited and my time to market is also limited, however, I am determined to get this to work like a well oiled machine.
Now with that said, I'm trying to formulate a good marketing strategy for myself.
Ideally, I want to ramp up quickly, but in a calculated manner. At this point (pre-1st deal) I'm comfortable spending about $600 a month in marketing.
Because of my limited availability, I will need most of my marketing to be automated, therefore, I am planning to have a service write and mail about 500 yellow letters a month on my behalf. Now my 2nd prong here is going to either be bandit signs or creating a presence online. To be honest, I won't have the ability to get out to my targeted area every Friday evening to place out signs and pick them up every Sunday afternoon - It's just unrealistic given my circumstances. So that leaves me with either paying soemoen to do it or creating a website. As of now, I'm leaning towards creating a web presence using the M5 Automated Marketing Machine This system, however, comes at a cost close to $100 a month and I'm wondering if that's the best way for me to market myself and my company. Has anyone had much success with online leads?
Finally, I'm thinking about setting up a local phone service through Vumber so I can direct leads to different #s in order to track where they are coming from.
Does this seem viable? Should I really only be focusing on 1 strategy first and work my way up? Thoughts?
Todd- are you still in the game my friend? If no, and I say this with utmost sincerity, you were wasting your time throwing $h%# at the screen and checking now what stuck on the other end. As a new real estate investor build your business one deal at a time. As your money grows you can grow your marketing avenues and strategy ali f with AI automation for auto pilot- Again no harm no foul- The below is my account ( not even my business account) Why? because you want to leverage all you can even if it seems silly
A girl and I were dirt poor came from nothing We had multiple fails with the FB marketing and CL adds (although maybe you should have better compelling headlines because craigslist is pretty good... Also- even though you will be working hard at first, think smarter not harder. I had a full time job (of which I quit over a year ago) I hid from my boss that I was a multi millionaire because I didn’t want them to look down on me with the sense “ why does he even bother coming here, is the $100,000 really that worth it - he’s greedy.”. That’s half right too - I am greedy in the sense of Leverage - Why use my riches when I can keep recycling it to strengthen my business as it is today. Now I have other advertising.
But didn't hire one person until this year- and no my GF and we were not overwhelmed with sometimes having over 16-25 deals happening simultaneously. But the list you we're sending to your acting like it's a one shot deal. You have to continually direct mail to these people. Also- cut the red BS and start getting confortable talking to sellers and be prepared to get hit by objections. Begin growing your buyers list Just fill it up like the village train. Then train someone to call these buyers and pay then to qualify each one. If a buyer is very vague and says dumb stuff like " if I gave you all the cash today - Can you just give me the title and we'll skip escrow". Luckily my VA sifters this imposter out. Look I work with many wholesalers and many are awesome, but so times. comments like one above need to be identified especially when talking to buyers... He said he had 49k cash then retracted and said he had only 46. After sending the property information over, it seemed he had never even been in a closing before. By all means, you may have whoever you want, but always remember (like the list story) if a prospect don't seem legit - toss them) allowing buyers like the example on for your list can cause dismay. Say I kept this gentlemen who was basically trying to daisy chain my deal, ended up in my junk C list which is still marketed. Don't waste not a second with a pretend buyer
successfully assigned Realtors Contract
Almost all realtor purchase agreements have a clause that says they cannot be assigned.
I have been a licensed Broker in the state of Massachusetts who also wholesales both off and on properties.
That statement above is Incorrect! All contracts issued by The Board of Realtors are assignable. Only lender based contracts (such as REO'a and HUD homes) are unassignable.
Below is proof! Real deals
Photo 1 Assigned the contract of Realtor
Photo 2 Closed on foreclosed land
On Market Wholesale Property I found and Closed on with spending $0.00 of my own money.
It is ILLEGAL to market properties you do not own unless you are a licensee.
Not if he has equitable interest with the Seller.
What’s up BP!
Recently, I came across a wholesale strategy called Astro Flipping, which seems to be a way to get multiple deals out of one property. This seems to be the new craze.
Have you done these kinds of deals before? What’s the process for successfully completing deals like these? And Is it worth it?
Thank you BP!
Astro Flipping is just a fancy way of selling online coaching. If you wholesaled before you probably Astro Flipped and didn’t even know it. It’s when ( you) partner with (1) investor and complete deal- Usually latching onto the Dispositions side of the spectrum.
1) Wholesaler Gets property under contract tract with motivated Sellers
2) Ensure due diligence and makes sure the numbers work.
3) Then Partners with another investor who gains equitable interest of the property and lines the deal up with a prospective buyer -
4)Secures buyer then reassigns back to wholesaler for a $2000 to $3000 fee-
5) Wholesaler now has equitable interest back and a buyer ready to close- Buyer closes and wholesaler gets their assignment fee LESS exit fee of either $2000 - $3000 to partner who provided buyer.
So imagine doing this with 20 wholesalers who don’t have a solid buyers list and come to you because all your business focus is on direct to buyer/flipper/ landlord with airtight contracts on a national platform. While those 20 closings are scheduled 15 more investors come with their contracts and dropping them off by transferring equitable interest securing a buyer, and existing for a fee - You charging the wholesaler a fee of usually $2000-$3000 because you’re delivering the deal back to them with a secured, willing and able buyer.
Has nothing to do with a rehab team -
It's having one wholesale get the deal, you don't JV nor daisy chain you actually take control of the property through getting deal fully assigned to you. Once you now have equitable interest you market for a buyer AT THE SAME PRZICE POINT as the wholesaler, after securing a buyer, you reassign to wholesaler with buyer attached to the deal. Have a stipulation that although you are assigning the contract to the buyer, you are not given them full assignment until day of COE (usually so they don't back out of the deal and try to go over your head as well as allowing you to reassign back to wholesaler.
I'm considering backing out of the deal I was going to do. No money exchanged yet, but signed a contract with a wholesaler. I really wanted to get this house and think it would have been a great first flip for me. With the crisis going on, I feel like things have not peaked yet and will get worse until we stabilize.
I think as a HM lender they will be taking on higher risk hoping that a renovated home will sell in a timely manner AND for a good price. Banks will have a smaller pool of qualified buyers due to job loss.
With people out of work and the market having crashed in the last 6 weeks or so, cash buyers will not have the cash they once had. People collecting unemployment will not be able to qualify for a mortgage. It's a risky time for both sides of any real estate transaction.
I hate to sit on the side lines but I would rather be wrong than broke! :(
Deb S.
No! I wouldn't terminate the deal! Go with it! Remember, your money zone is out of your comfort zone. Don't be ordinary and take calculated risks. If the deal on the other hand is not a good one, obviously back out, but if priced at least 30-35% or more below ARV, GO FOR IT! You definitely sound like a novice, no offense. Let me ask you, what are the contingencies? Or, what's the timeline between the assignment and the closing? Also, what are the numbers? How much are you paying and how much did you calculate for the ARV? What information gathering and comps data did you extract to get that ARV? Many questions here. Investors make money when they buy, they don't speculate and when they buy. So if you have any inkling (regardless of this Covid 19 situation), if priced right before or during the crisis, you shouldn't have a problem. If you are intimidated for your first flip I'd suggest not backing out, but either go with it, and if it's truly a good price, quickly resell for more.. Or Assign your assignment to another investor for a $4000 Fee and walk away (that's if your numbers work in the first place). You could also renegotiate with the wholesaler their margin. Odds are they are making $10,000 or less on the project (if assigned) Tell him " I’m thinking about back out because my lender is having qualms about the whole covid thing and lending, I could maybe talk them out of it but can you at least knock off $3-4000 off your initial price”? Basically, exhaust all options before pulling out of a deal. People don’t like it and the wholesaler will be probably screwed with the seller. It’s either a good deal or bad deal ( no gray area) even now with where Covid is today, the real estate market is still moving along and is only forecast to dip along a buyers market with the increase of inventory with a minor increase of foreclosures from unemployment
Always think before pulling out of a deal. Believe it or not, reputation gets around and trust me, you don’t want that on your public investor report card.
I doubt it with your prediction about less buyers. There is a lot of unemployment, yet, a majority would have a small chance bring your buyer anyways. This isn’t the bubble of 2008 people. There are not huge stockpiles of subprime loans being give to anything with a heart beat and spec builders buying at market or above while value increases within 4-6 months. Again, if you did it correctly and made money when you purchased or was assigned to purchase, than you should be fine. If intimidated, again, assign your assignment to a willing investor. I also suggest you get a verifiable mentor who has many deals under their belt and align interest with them. Basically find a OG or investing a old grandpa wiseman who’s investing years show in his lifestyle and then align your interest with his in exchange for mentorship. Tell them, when found, if you can mentor me and show me through this deal I’ll split profits with you 50/50.
Totally wrong, people are buying just novices are running scared while the real investors stay Don’t be fake and move in on this property! You can do it
As you can see -I’m slanging deals (see proof below) with 4 closings scheduled thus far in may Not bad for a 35 year old ehhh? remember always be willing to learn new things Don’t think you know it all that’s what sets you behind
Real estate brokers (and agents) take listings (sign agency agreements with sellers) and/or act as agents for buyers. Rarer, they can act as intermediaries.
Stay away from giving the appearance of doing what real estate brokers do. Real estate brokers typically don't obtain a purchase contract or option in their name, and sell the contract or option.
This is not to say that doing the above as a business model does not require a real estate license (state requirements, laws and interpretations vary), bu,t that if you don't appear to be doing what real estate broker's do you are much less likely to be sued, accused, or catch the eye of the regulatory authorities. You do not want to make the mistake some wholesalers do by getting the seller to sign an agreement giving you a commission for procuring a buyer.
I respect everyone’s opinion on this matter and have heard some real great points. However, have you ever heard the phrase, “making a anthill into a mountain”? Well, that’s what’s going on here. Nobody really answered your question.
Yes you can wholesale without a license as well as create a business out of it! You can wholesale all day and whether they like it or not, your making money. I am a MA Licensed Broker and can tell you, unless your living in OK, IL or OH, you are good to go Sir. Although I personally would suggest getting your license, the excuse above is rather weak and sounds like you’re afraid of something. But anyway, without digressing too much like everyone has on this thread, I’ll break it down:
As long as you have equitable interest in the property (i.e you have a signed contract aka Purchase and Sales Agreement with negotiated terms and earnest money), and your name is on that contract along with the Sellers, you can market the CONTRACT itself, NOT the property, but the deal you are on the line to buy. As long as you’re not representing FOR ANOTHER for a profit, but instead, conducting business in your benefit, you are breaking NO laws.
-Never say “Hello, I haven property for sale people” now that insinuating you have legal title in the property and therefore are selling it- However, if you don’t have legal interest and you are marketing the PROPERTY itself, then the sound of it sounds illegal however, as a Broker, I would know exactly what you got going on however, would definitely know you lack education in the field and just winging it.
-The correct way is that your have for sale and are marketing the PAPERWORK you have equitable title interest in. Proper way of sounding is “Hello y’all! I have a great deal under contract. I am currently selling a contract for assignment of a great deal”!!!
Get it now- Nothing is illegal about it. Recently states put sanctions on wholesaling but will never 100% band it. It would be equivalent to marshal law if they did away with wholesaling. However, what they will do, is purposely throw barriers in your path to deter the inexperienced and clueless draw them out of the wood work and weed them out. This is your fly by night Wholesaler, who watched a few Youtube Videos, thinks they know it all, but when doing it they realize “Whoa, this is like work, the guy said it would be easy? Ohh well I quit!
Eventually they will banned non-licensed individuals because for the simple fact there are too many things people attempting this Real Estate game and want to fast forward through the learning and other important parameters needed. The ones your Gurus did but will never tell you!
Automate your business, remember you are selling the paper/contract or note OF the property not the Property itself, the Contract paper you are selling just so happens to have a property in its agenda. (See the loop whole). Perfectly legal and always will be legal. It WILL never be banned. It is a arbitrage flipping which was basically recognized in the 1972 in midst of that decade long recession, young couples int the suburbs, to save their own home value from falling victim to a neighbor foreclosure.
I want to make sure when I'm buying rental properties, that they can remain profitable in any market. I ignore the possibility of the value of the property increasing, I only am going to make decisions based on paying low enough for a property that'll give me my desired cash flow.
However this can all go down the toilet if for some reason I buy at a good cash flowing price in a hot market, then the bubble bursts and forces rent prices down and I'm not cash flowing anymore.
I want to minimize my risk as much as possible, does anyone who has been affected in 2008 remember how much your rental income decreased in relation to your property value?
Thanks in advance. I'm a beginner still trying to figure everything out so all insight and advice is appreciated.
Keep learning young grasshopper and just GO for it! You have to take risks so stop looking at other aspects. If you NOI and CAP rate is good, and overall rents are at 1% of total property value, then go FOR IT BRO!. In 2008 OR ANY BUBBLE OR RECESSION OR OTHERWISE, YOU WANTE TO RENT RENT RENT! IF YOUR PROPERTY VALUE GOES FROM $400,000 TO SAY $300,000 YOUR RENT WILL STILL STAY THE SAME. SAY YOUR RENT BROKE EVEN AT $4000 PER MONTH AND THE VALUE OF YOUR PROPERTY IS $400,000... THEN, A BUBBLE BURSTS AND YOUR PROPERTY FALLS TO SAY $290,000. THAT WOULD GIVE YOU POSITIVE CASH FLOW SINCE YOUR RENT REMAINS AT $4,000 AND YOUR PROPERTY IS AT $290,000! WHEN RENTAL PROPERTY VALUE GOES UP, SELL, WHEN RENTAL PROPERTIES VALUE STAYS THE SAME OF DROPS, HOLD… Learn that rents don't really follow the market value of property so much as it correlates directly towards an areas employment statistics.
Not sure about the comment with the friend with 75% occupancy rate during the last recession. Sounds like your freinds freind who owns those 70 rentals either has poor property management, or has no clue what they are doing. I thrived with my rental properties during the recession. People do get creative, but what I PERSONALLY experienced WITH MY PROPERTIES, that although my value went down, my rents more or less stayed the same.. And I NEVER HAD A VACANCY! Since foreclosures soared and unemployment rose, people had to downgrade from a mortgage to renting. So there was a renter surplus and as long as you kept you rentals in tip top shape, you would always be able to fill your vacancies. Please someone who rented through the great recession other than myself confirm my statement.
@Billy Gulley I bet you $5,000 you didn't do shi$ nor could you do anything! Let him go? Crush them? Are you gonna call the Board of Realtors to report the Wholesaler? Ohh NO! NOT THAT- From your false and made up story above tells me you couldn't squash a butt. Take a seat brother for you cannot and have never helped anyone in RE or taught anyone a "lesson"- If you ever defamed my wholesale ads I'd sue your *** for defamation of my business. I think you should be cautious before stating false stories that sound ridiculous.