All Forum Categories
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
All Forum Posts by: GARY LEONARD JR
GARY LEONARD JR has started 0 posts and replied 27 times.
Post: Wholesaling Flyer service, tired of doing it myself
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Bill Gulley:
Gotta say, I almost find it amusing that wholesalers don't understand, especially in Florida, that your "business" is like running a bookie joint, you're underground, black market, off the radar "business" is the target for regulators. Yet, you want to advertise!
What happens when you mail out your flyer and one of those cash buyers happens to be a Real Estate Broker, Real Estate Attorney, Title Attorney, Agent of a Banker type that is having a really bad day and decides to just nail some joker?
My GF got one of these flyers, guess who has it now?
After the first of the year, I'll do something with it. Probably call and act stupid for him just to see how badly he screws up. Then comes the "meeting of the minds" and his education. I think if he seems agreeable and repents to better tactics (after I learn what they are) I might let him go his merry way, might even help him. If not, he'll be toast, depending on his methods. All because he sent a flyer out in the mail.
Wow, just thought too, if he's dealing fraudulently then he might get mail fraud added to his list! Oh, that's bad stuff!
It just depends on what he tries to pull.
My intention is to teach not seek and destroy. But, if a treaty cannot be reached and things aren't going to be done properly, there won't be screwy guru stuff going on in my area.
I'm pretty sure other feel the same way, you have thousands of agents running around down there, so I suggest you not mail anything!
And, I'll let you know how this pigeon turns out. Hopefully it will work out well for him. :)
With all due respect you are incorrect in your explanation of the RE Wholesale Market. I actually just assigned a Wholesale Deal with a Real Estate Broker directly about a week ago. Furthermore, about 25% of my Buyers List is made up of Brokers, Appraisers, and Real Estate Attorneys. A RE Attorney is actually on my Wholesale Team.
It is not no underground practice for people have been doing this way before the practice got it's name "Real Estate Wholesaling". You can mail any Wholesale deal you want! The board has no restrictions of wholesale practices. I assign half my contracts to Brokers and Agents alike, and they have become somewhat of a extended team members for me.
Kind of aggravates me how you are in fact, 100% inaccurate on your rant above, yet are so assured that the stuff you are saying is of fact! What can you GF do if I sent a Yellow Letter? In the United States and Canada, one can market property contract if they have equitable interest in the property, no if's ands or buts. If you sign a Purchase and Sales Agreement with a Seller, you have what is known as equitable title to the property (yes even though you haven't paid a dime yet). How do I know this? I have made over $2,000,000 in the past 3 years wholesaling real estate in Massachusetts, Georgia, TN, and all of Florida. Actually, my go to buyer in FL is a Real Estate broker. It is NO black market my friend and NOTHING will happen to anyone advertising their contract for assignment. Although, 60% of my investments I buy the property in cash and quickly sell within 2-3 weeks to a cash end buyer, or double close, I still assign a good majority of contracts.
What makes what I'm saying valid and why I am calling you out? Is because I am a licensed Real Estate Broker in Massachusetts (#952683390 Board of Realtor Lic # Pin).. Owned and operated Leonard's Real Estate from 2001 to 2013 and had 8 agents working for me. Yes, I was also wholesaling deals and assigning contracts on my off time to my buyers lists. There is a lot of Wholesalers (I will agree) who get into the business that have no idea what they are doing, and in turn, perform illegal acts knowingly or unknowingly. Most I see use inflated ARV's (goes back with not knowing how to find MLS data etc.)..A realtor is a Wholesalers important asset if you ask me! Every Wholesaler should seek out 3-5 agents, brokers, or attorneys to run them comparable market analysis on potential deals. Sometimes, when I wholesale remotely in FL (which I did this 2 months ago) in West Palm Beach I found a buyer through a Agent who hand delivered my deal (assignment) to their cash buyer clients! Me and you both know you have no clue what your saying and your uttering pure opinion and guessing. Your GF did Zero! If she reported any Wholesale flyer to a broker, agent etc. NOTHING will happen. As long as they have equitable interest, submitted their EMD, they have all the right to market THE PAPER WORK *AKA CONTRACT for Assignment. Basically the wholesaler's advertising is saying "HELLO, I HAVE A CONTRACT FOR SALE (ASSIGNMENT) TO CLOSE ON THIS PROPERTY- IF YOU WANT TO HOP IN MY SHOES AS THE BUYER, THERE WILL BE A ASSIGNMENT FEE AND EARNEST MONEY DEPOSIT..Quick thinking inside the box guy, and stating false statements on things you have no clue are true or otherwise. Wholesale is not a underground business, damn, a lot of brokerages are actually doing wholesale deals themselves. In Illinois and Oklaholma, however, due to Wholesalers who have no idea what they are doing, and advertise contracts that they dont actually have interest in,caused great concern for these 2 states. Like one time I met a 50 year old woman on Connected INvestor who was fishing for accolades from people that she got her first deal under contract and she was excited. But then continues to ask the community "ok now how should I close on this property and how do I assign a contract blah blah". I could tell this woman was clueless and that noway she was able to snag a deal without either a partner, or through the illegal act of BROKERING WITHOUT A LICENSE. So, as the well known vigilant broker I am, I investigated. She gave me the address and I find the property on the IL areas local MLS. It wasnt pending and still FOR SALE. I ask the woman "do you have equitable interest in this property" which she proceeded to say to me "what's that?".. I then asked her, I see the property is still "for sale", if she had it under contract, and she tells me "umm no I don't but the Seller told me he would pay me $3400 if I found a Buyer for the property"... I then calmly ( I was boiling inside) explained to her that she can get into a lot of trouble doing what she is doing without having a established signed contract with the Seller. She was Brokering without a license and had no idea what she was doing was wrong.. She just couldnt grasp the concept that one must have equitable interest to market the deal in which the property is under and NOT market the property for a fee from the Seller. NOW THAT IS ILLEGAL. And because of stuff like this happening in mass quantities, let legislation to regulate Wholesaling (like they did in OK) in which you can Wholesale 1 property per year without a license, however to continue wholesaling in these states, one must obtain a license by that state. Only 2 states out of 50 have this law, in which doesn't apply to me because although I'm not licensed in those states, I am still A licensed broker and the law has not specified license in which they consider NOT ALLOWED TO WHOLESALE. I do see it all the time, misinformed wholesalers brokering without a license and I don't tolerate that stuff as a Broker. Although my License is renewed year after year, I sold my brokerage to Century 21 North east in April of 2013 and created/opened my own Real Estate Wholesaling Business. I have much respent form many agents and brokers- hell most of them work part time for me. In all the other states, you don't need a license, however must follow the legalities of the practice. WHICH IS: YOU ARE TO HAVE EQUITABLE INTEREST AND MARKET THE CONTRACT (PAPERWORK TO BUY THE PROPERTY) ONLY.. Yes you can show photos etc etc. The only thing a Realtor or anyone can do is terminate a contract if they didn't prefer wholesalers. Me I tell them straight up.
Anyway, although many people have no idea what they are doing, leads them to do dumb stuff which gives wholesaling a bad connotation.. I do believe all Wholesalers who get licensed solely to have a firm educational BASE of the practice and harness a sense of fiduciary responsibility to their buyers and sellers to be straight up, and follow the guidelines. I've made more wholesaling than i did 12 years at my brokerage.... All I am saying is, KNOW YOU FACTS before climbing up on the soap box proclaiming stuff that is NOT true! I know many agents in FL that would gladly show you their credentials, read my rebuttal to your statement and will agree with me 110%.. #knowyourfacts #statingopinionsasfactannoysme
Post: How to wholesale when house is listed with and agent?
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
JUST SIMPLY SAY TO THE REALTOR- "HELLO MY NAME IS_ I AM A INVESTOR AND LOOKING TO BUY, FIX, AND SELL, I WANT TO MAKE $25,000 INTO $30,000, THIS IS NOT A LONG TERM STRATEGY,I'M LOOKING TO BE IN AND OUT OF THE DEAL QUICK." JUST REMEMBER THE IMPORTANT THING IS YOU ARE GOING TO BUY, FIX AND SELL (EVEN IF YOU PLAN ON ASSIGNING) YOUR EXIT STRATEGY IS REALLY NONE OF THE AGENTS BUSINESS. FURTHERMORE, THE AGENT SHOULDN'T BE CONCERNED HOW YOU ARE PURCHASING THE PROPERTY. THEY ONLY CARE ABOUT IS THAT YOU DELIVER ONE WAY OR ANOTHER.
Post: How to wholesale when house is listed with and agent?
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Lenzy Ruffin:
@Maikel Figueredo, I think you missed the point that @Adrien C. was making. You can put an MLS-listed property under contract and wholesale it. It's done by wholesalers all over the country by assigning the contract through whatever is the local convention for contract assignment. You will need to show proof of funds, though, regardless of using a contract or LOI or anything else. The listing agent is going to require that you prove that you can buy the house.
The point Adrien was making is that the property you're looking it is not a good wholesale candidate. If it's been listed for over 100 days, everybody who has an Internet connection and invests in your market knows that property is for sale and nobody is interested in buying it at that price. So who is going to buy it from you at the list price plus your markup?
If you can negotiate the seller down to a wholesale price and put the property under contract, that's something entirely different. At that point, you'd be offering your buyers a deal that is not available on MLS.
You should check with a local REIA to see how others in your market are wholesaling MLS properties. The paperwork, addenda, name on the contract (your name or LLC), etc...all these things are done differently in different localities, so the best way to find out how it's done where you are is to ask someone local who is doing it.
OK- If any wholesaler or Realtor tells you to ignore listed properties or shy away from them is losing out on tens of thousands of dollars this can make you.
BEFORE I BEGIN, I AM BOTH A REALTOR AND A WHOLESALER
YOU MOST CERTAINLY CAN-
WHAT I AM ABOUT TO TELL YOU IS FACTS- NO MATTER WHO SAYS SOMETHING DIFFERENT AFTER MY POST.
THE GENTLEMEN WITHIN THIS THREAD HAVE REALLY GOOD POINTS AND THEY ARE ALL VALID, HOWEVER, I CAN SENSE EVEN THEY HAVE LIMITED BELIEFS ON THE POWER OF REALTORS.
MY FIRST WHOLESALE PROPERTY EVER (AND I'VE DONE OVER 100) WAS WITH A REALTOR INVOLVED ON THE SELLERS SIDE.- THERE ARE MANY MANY MANY REALTORS WHO LIST JUNKERS (FYI HINT: TRY SCOUTING OUT LISTING AGENTS FOR REMAX AND/OR KELLER WILLIAMS)... WHY THESE 2 RE FRANCHISE FIRMS? GUESS WHAT? BOTH OF THEM WERE STARTED BY INVESTORS/WHOLESALERS ( THE GENTLEMEN WHO CREATED KELLER WILLIAMS I BELIEVE WAS JUST A WHOLESALER)**.. THEY ACTUALLY TEACH THEIR NEW AGENTS THE POWER AND ADVANTAGES OF WORKING WITH INVESTORS OF EVERY KIND, WHETHER IT'S PASSING PAPERS (ASSIGNMENTS/DOUBLE CLOSES/OR TRADITIONAL BUY, FIX AND SELL/HOLD- OWNER FINANCING AS WELL)... SOME OFFICES HERE AND THERE GO ROGUE AND DIRECT A MORE TRADITIONAL ASPECT OF THEIR AGENCY (HOWEVER, THE FRANCHISORS OF THE COMPANY PROMOTE THAT WORKING WITH INVESTORS SHOULD NEVER BE IGNORED- THEY HAVE A 3 HOUR SEMINAR FOR THEIR NEW AGENTS COVERING EVERYTHING FROM ASSIGNMENTS TO DOUBLE CLOSES (YES)!
DON'T BE SCARED AND JUST DO IT- I DON'T CARE IF IT'S YOUR FIRST TIME YOLO (BTW I AM A AGENT MYSELF)
I JUST MOVED A PROPERTY (NOT FOR ANOTHER BUT FOR MYSELF THROUGH ASSIGNMENT- MEANING I WAS A INDIVIDUAL WASN'T ACTING ON BEHALF MY RE AGENCY)...OK NOW HERE IS HOW YOU WHOLESALE MARKETED PROPERTIES...
1) FIND A PROPERTY- THE COMMENTS ABOVE DIRECT YOU TO DIVERT TO THE OFF MARKET FSBO'S WHICH SHOULD ALSO BE A MAJORITY OF YOUR BUSINESS HOWEVER SHOULD EQUAL OUT TO YOUR ON MARKET PROPERTIES AS WELL.
- GO TO REDFIN, SEARCH YOUR FAVORITE ZIP CODE
- LOOK UP WHATEVER PROPERTY TYPE YOU WANT AND GO TO "SOLD" PROPERTIES WITHIN THE PAST 3 MONTHS ONLY OR EARLIER
- GO DOWN THE PAGE AND CLICK "DOWNLOAD ALL"
- IT WILL THEN PROMPT YOU TO OPEN AN EXCEL DOC- OPEN IT-
- FROM THERE FILTER THE PROPERTY PRICE LARGEST TO SMALLEST
- FIND THE AVERAGE PRICE BY HIGHLIGHTING THE ENTIRE "LIST PRICE" COLUMN OF THE SOLD PROPERTY SPREADSHEET
- AFTER CLICKING THE "AVERAGE" FUNCTION, YOU WILL BE GIVEN A DOLLAR AMOUNT- (BOLD THAT FIGURE)
- THEN GO TO THE SQUARE FEET COLUMN AND DO THE SAME- FIND THE AVERAGE SQUARE FOOTAGE - THEN CLICK "AVERAGE" HIGHLIGHT THAT FIGURE TOO
- DIVIDE THE AVERAGE DOLLAR AMOUNT OF ALL THE PROPERTIES SOLD WITHIN MAX 3 MONTHS FROM THE AVERAGE FIGURED SQUARE FOOTAGE TO GET YOUR MEDIAN PRICE PER SQUARE FOOT
- YOU WILL USE THIS FIGURE TO DETERMINE IF A PROPERTY WITHIN YOUR PREFERRED AREA CODE IS DEEPLY DISCOUNTED
- THEN, YOU WILL GO BACK TO REDFIN AND CHANGE THE SOLD TO ACTIVE AND DO ALL THE FILTERS PER YOUR PREFERENCE- "PUT IN KEYWORD AREA- "TLC" "CASH PURCHASE" , "NO FHA" AND "UNINSURED" AS WELL AS HAD A PRICE REDUCTION - EITHER MUTLTIPLE OR AT SOME POINT WHILE IT WAS LISTED HAS A REDUCTION (THIS USUALLY MEANS SELLER HAD HIS LISTING AGENT REDUCE PRICE BECAUSE HE WANTS TO SELL QUICKLY- ) SO IF A PROPERTY YOU FIND (AND THERE ARE A LOT) HAVE HAD 3 REDUCTIONS IN PRICE AND HAS BEEN LISTED FOR AWHILE... IT CAN HAVE BEEN LISTED FOR 2 DAYS, AS LONG AS IT HAD A PRICE REDUCTION, THAT IS A TELL TALE SIGN THE SELLER WANT'S TO GET THIS PROCESS OVER AND DONE WITH- JUST MAKE SURE IT'S NOT A FORECLOSURE (THAT WILL BE A WHOLE OTHER TACTIC I AM NOT GETTING INTO ON THIS THREAD- BUT MANY WILL ALSO SAY THAT TOO CANNOT BE DONE)***
2) YOU WILL THEN GET A LIST OF ALL PROPERTIES THAT CANNOT HAVE BANK FINANCING BUT SELLER WILL HAVE IT LISTED WITH AN AGENT-YOU WILL FIND LISTING AGENTS NUMBER
THEN BEFORE CALLING GET YOUR MATH SQUARED AWAY USE THIS FORMULA (WORKS NATIONWIDE AND NO MATTER WHAT I MAKE MONEY FROM THIS FORMULA)- ARV * 65% - Repairs - wholesale fee = Wholesalers Max Offer
FYI wholesale Fee should be anywhere between $5,000 - $25,000 depending on the deal
whatever figure you have for your MAO, if it's much less than the "list Price"- DON'T LET THAT DISQUALIFY THE PROPERTY- PLACE YOUR OFFER ANYWAY! IT'S CALLED NEGOTIATING
3) FOLLOW MY EXAMPLE VERBATIM AND YOU WILL PROBABLY NOT EVEN LOOK AT A FSBO AGAIN
EXAMPLE: YOU FIND A PROPERTY THAT CANNOT BE FINANCED BY FHA, NEEDS WORK, US VACANT AND IS BEING SOLD "AS IS" AS WELL AS PRICE IS PER SQFT IS LESS THAN THE MEDIAN PRICE YOU FOUND.
IN THIS EXAMPLE YOU FOUND A PROPERTY FOR $100,000 YOU RUN IT THROUGH A QUICK AND DIRTY COMP SEARCH (IF YOU DON'T HAVE MLS- USE BIGGER POCKETS CALCULATOR FOR ARV (IT'S PRETTY ACCURATE AND NOT TOO FAR OFF) - JUST DON'T USE ZILLOW OR TRULIA OR EVEN REDFINS- USE BIGGER POCKETS ARV CALC AND/OR THIS SITE THAT ALSO HAS A FREE ARV CALCULATOR CALL REIKIT--- I NOTICED THAT EITHER TWO SITES HAVE ARV VERY SIMILAR AND NOT TOO FAR OFF FROM THE MLS--- WAY MORE REALISTIC THAN ZILLOW, TRULIA ETC INFLATED ARV'S!!!! DO NOT USE THOSE COMPS PLEASE!!! EITHER GET THE ARV FROM A REALTOR, OR USE EITHER ONE OF THOSE 2 SITES.......
YOU FIND OUT ARV IS $390,000 THE PROPERTY IS 1900 SQFT AND NEEDS AN ESTIMATED $65,000 IN REPAIRS.. YOU ALSO WANT TO MAKE $25,000 FROM THIS DEAL
AFTER PLUGGING EVERYTHING IN- YOU GET $163,500----- FOR GOOD MEASURE I DEDUCT AN ADDITIONAL $2000 FROM MY TOTAL MAX ALLOWABLE (MY PREFERENCE ONLY YOU DON'T HAVE TO) AS A FUDGE FACTOR AMOUNT ( YOU WILL SEE WHY SHORTLY) ...
NOW YOU HAVE $162,500 AS YOUR MAO- WHICH IS PERFECT BECAUSE THE LISTING PRICE IS $100,000-- THIS IS A POOR EXAMPLE HOWEVER IF YOU SEE THAT MUCH OF A DIFFERENCE BETWEEN YOUR MAO AND THE LISTING PRICE (WITH PRICE IN YOUR FAVOR) THEN THAT WOULD TELL ME THE SELLER IS MISINFORMED WITH WHAT IS GOING ON IN HIS OR HER MARKET, AND THAT THE REALTOR IS AS GREEN AS PEAS! OR HAS NO CLUE WHAT THEY ARE DOING (WHICH MOST BTW REALLY DON'T )****
YOU WILL THEN CALL THE "LISTING AGENT " WHICH IS USUALLY AT THE TOP RIGHT HAND CORNER ON REDFIN
CALL THE LISTING AGENT-
TELL HIM THIS - THAT YOU ARE INTERESTED IN BUYING THE PROPERTY AND THAT YOU CAN OBTAIN CASH... YOU WILL THEN TELL HIM YOU WANT TO BUY, FIX, AND SELL THE PROPERTY!! THEN FOLLOW RIGHT UP WITH- "I AM ALSO NOT REPRESENTED AND I WOULD LIKE FOR YOU TO DELIVER MY OFFER AS MY BUYERS AGENT- I WILL PAY YOU $2,000 FIXED AMOUNT AT CLOSING AS WELL AS HAVE YOU REPRESENT ME AS MY LISTING AGENT WHEN I RESELL" - I AM AWAITING MY LENDER TO WIRE OVER THE FUNDS WITHIN THE WEEK SO I WILL BE ABLE TO CLOSE WITHIN 10 DAYS OR LESS- WILL PUT $100.00 DOWN EMD TODAY, WILL THAT SUFFICE? THEN SHUT UP!! DON'T SAY "WELL I AM A INVESTOR AND WHAT I WANT TO DO IS ASSIGN THE PROPERTY AND HAVE NOTHING BUT EQUITABLE INTEREST IN IT" ........ THE AGENT MAY NOT UNDERSTAND ALL THAT TALK, PLUS IT'S NONE OF THEIR BUSINESS WHAT YOUR GOING TO DO, AS LONG AS HE RECEIVES 3% FROM SELLER, THE $2,000 FROM YOU AS WELL AS HIS CLIENT SELLING OFF HIS PROPERTY AT THE PRICE CURRENT LISTED PRICE (OR WHATEVER YOU NEGOTIATE) .... SAY THE ABOVE IN YOUR OWN WORDS, BUT DON'T DEVIATE-
NOTE: LET YOUR BUYERS KNOW TO USE THE SAME AGENT WHO IS LISTING THE PROPERTY CURRENTLY AS THEIR LISTING AGENT WHEN THEY ARE READY TO SELL-
YOU AND BUYER THEN COMPLETE THE ASSIGNMENT CONTRACT - (INDICATE YOUR SPREAD TO THE BUYER- BEFORE THE CLOSING- WOULDN'T HURT HAVING THE BUYER INTRODUCE HIMSELF AS ONE OF YOUR FINANCIAL ENTITIES-- THIS WILL A) ELIMINATE YOUR BUYERS ELEMENT OF SURPRISE WHEN HE SEE'S YOUR SPREAD AT CLOSING B) SO THE AGENT OF SELLER ISN'T CONFUSED OR FEEL MISLEAD, CALL THE AGENT BEFORE CLOSING TELL HIM THAT YOU HAVE ALOT GOING ON SO YOU WILL BE HANDING THE PROPERTY TO YOUR FINANCIAL BUSINESS PARTNER (AKA CASH BUYER) HOWEVER , NOTHING YOU AND THE AGENT AGREED UPON HAS CHANGED. REASSURE THE AGENT THAT THEY WILL BE STILL RECEIVING THEIR $2K PLUS THAT THEY WILL BE USED AS THE LISTING AGENT WHEN YOUR FINANCIAL ENTITY IS COMPLETED WITH THEIR REHAB--- (SIDE NOTE: MAKE SURE YOUR CASH BUYER TRULY DOES USE THE AGENT FOR THEIR DISPOSITION- IF YOU DONT KNOW THE BUYER WELL ENOUGH, I'D EVEN PUT A CAVEAT WITHIN THE ASSIGNMENT CONTRACT STATING THAT CONTRACT IS CONTINGENT UPON CASH BUYERS PROMISE TO UTILIZE THE "AGENTS FULL NAME AND LICENSE #" WITHIN THE ASSIGNMENT- THIS WILL OBLIGATE YOUR CASH BUYER TO KEEP YOUR PROMISE TO THAT AGENT TO USE THEM FOR THE DISPOSITION- MAKE SURE THE CASH BUYER FOLLOWS THROUGH WITH THIS AS WELL - KEEP YOUR PROMISE TO THAT AGENT AND YOU WILL BE ABLE TO DO BUSINESS IN THE FUTURE WITH HIM OR HER.
NOW- EVERYONE KNOWS EVERYTHING (TRUST ME- IT WORKS)
AGENT WILL NOT COMPLAIN WHY?
BECAUSE THEY ARE GETTING 3% FROM SELLER, $2,000 FROM YOU, AND WILL MAKE A FUTURE 3% FOR THE RESELL-
I DO THIS ALL THE TIME MORE THAN FSBO- IT'S NOT "MORE ADVANCED" AND CAN BE DONE ON YOUR FIRST DEAL IF YOU WANTED.... JUST DON'T BS ANYONE (EVEN IF A AGENT WASN'T INVOLVED)
IVE NOTICE A LOT OF WHOLESALERS WHO FAIL AND/OR HAVE DEALS FALL THROUGH DON'T DISCLOSE EVERYTHING UP FRONT WHICH LEADS TO A SERIES OF "SURPRISES" FOR BOTH THEIR BUYER AND THE SELLER.. YOU DON'T HAVE TO TELL THE AGENT YOU ARE PLANNING ON "ASSIGNING" JUST
Post: Double closing in Massachusetts
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Matthew Eddy:
Good morning Ann
Yes I am aware that I could not use buyer C’s funds to purchase a property, I was taught that in one of my classes, I liked how you were right to the point with your answer, my purpose for asking the question about double closings is I am searching for mentors in the real world of real estate, I guess I could have asked google the question but that wouldn’t have got me in touch with real people with real answers, this site is fantastic for beginners like myself, I’ve been installing flooring for 43 years working with realtors and new builds and investors, I decided to retire my back and knees from my trade so I can continue to work with clients on a different level, I just completed and built my dream cabin in central Maine, I coordinated the entire project and hired all the contractors and paid them as well, I do have a passion for real estate, one of my goals is to gain relationships with realtors
Thank you for your answers
Mat
This is all quite simple. I do it all the time with my firm my CLOSING ATTORNEY does it for me all the time! The person above in this thread is 100% correct recent laws have made using buyers money to close out contract with seller is now deemed illegal and cannot be done but there is a way around that like everything else.
if you want to maintain the old tradition of using the buyers cash to close out your contract with the original seller what you will have to do to stay within the law the new law that is, is to have your lawyer write out a promissory note to the cash and buyer securing them with your equitable interest making that cash buyer a temporary lender. The cash buyer through the construct of a promissory note turns them into a temporary lender so you can utilize their funds to close out the deal between you and the original seller. Once legal title is obtained, the wholesaler is now the active seller of the property and then executes the contract between themselves and the cash end buyer. So basically you can still Kind of do it the old way, however. The only way to keep the old tradition of the double close is enacting the process of turning the B & C contract into a temporary “Borrower & Lender. BUT THIS REQUIRES YOU TO EXPLAIN FULLY TO YOUR BUYER AS TO WHY YOU ARE HAVING THEM SIGN A PROMISSORY NOYE”. SIMPLY BE HONEST AND TELL YOUR BUYER THE PLAN AND PROCEDURES WELL BEFORE YOUR CLOSING DATE.
RECAP
A & B HAS A CONTRACT
WHOLESALER= B
B DOES NOT HAVE YHE FUNDS TO CLOSE DIRECTLY WITH A
B MARKETS THE PROPERTY AND FINDS C
C= CASH BUYER
AFTER B GOES INTO CONTRACT WITH THE CASH BUYER IT IS YHE WHOLESALERS FIDUCIARY AND ETHICAL HONEST RESPONSIBILITY TO DISCLOSE THEIR PLAN TO THE BUYER AND BUYER WILL EITHER CANCEL CONTRACT (NOT LIKELY) OR AGREE TO IT.
DAY IF DOUBLE CLOSE ISSUE THE CASH BUYER A NOTARIZED PROMISSORY NOTE TURNING THEM INTO A TRANSACTIONAL LENDER AND YOU BORROWER IN ORDER TO DIP INTO THE B&C ESCROW TO EXECUTE THE CONTRACT WITH MOTIVATED SELLER.
B NOW HAS THE MONEY C HAS LENDED, B THEN TRANSFERS ALL THEIR LEGAL OWNERSHIP OVER TO C WHICH COMPLETES THE LOAN AND EXECUTES THE B&C CONTRACT.
B THEN RECEIVES THEIR MARGIN AFTER EXPENSES FROM THE A AND B CONTRACT IS PAID OFF (REMEMBER, THAT C IS PAYING THE ALL THE CLOSING COSTS WITHIN THE B&C SIDE SINCE, YOU “ B” used THEIR FUNDS THROUGH A LOAN PROMISSORY TO CLOSE DIRECTLY WITH A EXCLUSIVELY. SINCE C WAS NOT THE ONE CLOSING WITH A (WHICH HAPPENS DURING THE ASSIGNMENT METHOD) THE BUYER PAYS COSTS FOR CLOSING BETWEEN B (YOU) & C WHICH Fortunately eliminates the wholesaler having to pay double closing costs. The law just added a layer of disclosure to the max where the wholesaler is basically forced to create some sort of lending contract with the buyer where it would be the buyers soul decision and permission for the wholesaler to use their money out of escrow to close with the original seller. Kind of hard to explain, the best way to explain is the old way was a little sneaky Even though the end result would be the same it’s just a little miss leading regardless
Post: Buying Portfolios vs Single Properties on Roofstock.com
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Jeffrey Isenberg:
Jenny,
Great question as there is indeed a lot of focus placed predominantly on cash flow that makes the returns associated with out of state appear to be the way to go.
However, real estate returns are obtained from 4 areas: cash flow, appreciation, tax benefits & equity build up through amortization. When combined with the appropriate use of leverage, you can supercharge your returns in excess of 20% right here in the local market.
Often appreciation is overlooked, however this is a very important component that allows you to re-leverage at the appropriate times to build your portfolio towards achieving the goals of income replacement and wealth building.
Keep educating yourself with the knowledge from the BP community. Once you have the right team in place including property management, investing in your own portfolio is not that intimidating.
Jeff is 100% correct! I have 4 properties with roofstock and would have to admit, it is truly AWESOME!
now I cannot speak for everyone who has invested in this however what I can do is speak upon what I experienced. Now, what Jeff says above, educate yourself further in regards to 1031 exchange is and the different avenues you could take to build your wealth. there are other avenues or you could obtain rental portfolios without even seeing the property never mind dealing with the tenants.
However, what I can’t tell you is that I started making money since day one with my first property and now all four! Now a quick disclaimer I am not in no way shape or form affiliated with roof stock nor am I paid to promote them or anything like that so invest at your own risk!
All I know is that in my experience roof stock touches base on everything you have said you do not want to do, for example “play landlord” you basically just sit back and watch the money roll in (given it is a good investment). However I am building wealth off of roof stock and started with $25,000.
Although skeptical at first, my returns are amazing! Also, For each one of my rentals I have property management team they set you up with for each. Some people just set it and forget it however I got into the whole thing. I actually requested their names and numbers and touch base with them from time to time to see what’s up and if there is any obstacles they are facing. Just by speaking with these guys you gain more and more knowledge as well as more insight on how for each one of my rentals I have property management team they set you up with for each. Some people just set it and forget it however I got into the whole thing. I actually requested their names and numbers and touch base with them from time to time to see what’s up and if there’s any obstacles they are facing. Just by speaking with these guys you gain more and more knowledge as well as more insight on how everything works.
The main things I like about roof stock that other platforms related to their function is:
-You are literally just the owner- meaning you don’t even need to speak with anybody and just receive updates through email. You don’t evict nor vet tenants
-The properties that you obtain are already rented out meaning they already have cash flow as soon as you invest in them. As I stated I saw cash flow the first week since it was the end of the montThe properties that you obtain are already rented out meaning they already have cash flow as soon as you invest in them. As I stated I Instantly saw cash flow!
-they give you easy to read tools and data for each one of your rentals that you could easily measure and leverage
-It’s like they took Amazon, Podio, and Fundrise, and smashed them together! I am loving this!
Gary!
Post: Rental Arbitrage -how to do airbnb without BUYING
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Ken Latchers:
1) you are not netting 2k. You left out vacation rental insurance, you left out things like furnishings and maintenance. Or replacement cost or risk.
Also, an owner would be making a ton of equity if they owned outright.
2) I think this is the kind of strategy that works better in places with high rent and High house prices.
I paid 135000 for 2 Townhomes that grosses 65000 a year. Is a much better deal to own these then to try to sublease. And I get all the profits for the same amount of work. And I build equity and I'm not subject to the whims of landlords or property owners who change your mind or Etc
Originally posted by @Kinohi Larey:
@Penny Griffus It's been going well! We are making very good margins. Of course not as good as some "mentors" online advertise, but still way better than If we were to purchase a property and have a mortgage. Here are some quick numbers for one of our units:
Our rent: $2,375
Other variable expenses (internet, toiletries, etc) ~ $120
Our average income from STR (After service fees, cleaning fees):
$4,750
So we're netting over 2k a month. Pretty decent margin if you ask me :)
Ken I hear what you are saying Sir and you have awesome valid points that I never even took into consideration. For that I would like to Thank you for people like you as well as your knowledge is what I love about this site. Thank you Brandon as well for putting all this together.
Anyway, I am an actual person who actually executes Airbnb arbitrages throughout the state of Massachusetts. I’ll be more than happy to prove it to you as well. The gentlemen, Jose is 1000% correct Sir with everything he said from a numbers game and what to offer.
I get your points, but being also a RE broker (Torrey and Associates is my Agency Business) I’ve seen all aspects of subleasing. With these Apps nowadays, we have great opportunities. You are correct Ken and I’m not discrediting you at all Sir, however you are totally ignoring the concept.
I started off by calling slumlords in a city outside of Boston. When I say slum lords I'm not talking about the buildings like the movie "The Super" starring Joe Pesci. I digress. The cost of doing this, vary and is exclusively up to your clientele and what you can or cannot spend etc. I know one day he doesn't spend a freaking dime he goes to the nearest Walmart just like somebody said in one of these posts to supply his STR. Ohh yeah I basically get mine from IKEA.
however I’m seeing figures like four to $8000 first off you guys are getting way too over your heads with this and making it way too difficult. Right now I have five portfolios all arbitrage throughout Massachusetts southeastern in North. I ask for 30 day minimum stay and minus my first one which was a slum LOL, they’re in decent areas
To get these places I gathered up chunks in chunks of landlords names numbers and email addresses skip trace as many as I could contact them and got a bunch of “No’s”. Even after I told them that I was an established broker in the city and they knew about my company some of them I actually knew who they were and they still said no. But why I think this gentleman talking hear about arbitrage is telling the truth of how he knows this stuff is because I employed it myself.
probably not in the same way as him however I utilize the same tactics. I never offered him any profit share of what I make but what I did was do research about that particular landlord of course I didn't do it for the thousands of chunks of XL spreadsheet landlord list I had, But just being a broker and I have some sales people that do nothing but rentals I know where there's a lot of vacancies in the nicer areas as well. So over the years you get to know what's wrong with a certain area why is there so much turnover why is there a lot of vacancies are utilized my knowledge and I poked at it. For example, one of my portfolio rentals is owned by a landlord who is a great guy but he's out of town and this is an inherited property that he is so thickheaded not to get rid of. This makes it very hard for him to travel to fix things or to even call people in the area without being screwed of the job being done properly. And he didn't want to spend money on expensive property managers even though I knew a couple that were kind of affordable but I utilized my plan to take advantage. So I offered free property management in return to sublet 3 of his current vacancies. I sold it to them by I will look after three of those rental units, The common areas of the facility and the luxury of him not having to worry about vacancies because of his absence and remote management. I mean he will never have to worry about filling in a vacancy ever and I told him even if I don't have the place Sublett at any given time he will get his rent like clockwork every month and what she does until this day. 5 other STR I have and I offered free snow removal in the winter time And (4) free landscaping visits composed of 2 in spring and 2 in summer which my brother (who owned a landscaping company?) utilizes new workers he hired for these visits to see how good they are and what their strengths are. Haha he is more than welcome to practice on my properties LOL.
Now for the math True Life
Landlord : Joe Lac
20 Rufus Street Brockton, MA 02301
Block 8 units corner of Quincy St and Court St.
2 units sublet each in return for small property management (minor repairs) and winter snow removal plowing)
Simple
My Rental Agreement is an At Will
So it’s month to month so if he ever decides to kick me out I have a contingency and I contract that if he does decide he needs to let me know 30 days before hand that he’s going to terminate my TENANCY AT WILL status on that so I don’t have a tenant out on his ***.
I’ve spent a little under $800 to make each unit presentable and my rent is $1350 a month- One time cost (so far)
Plowing is done again my my brother who I get a huge discount. Basically I give em $50 a visit.
My rentals are a minimum of 30 days and I target professionals conducting business in Boston ( NO I DIDN'T ATTRACT THESE PEOPLE AT FIRST WITH THE SLUM LORD LOL)
I charge $125.00 per night for 30 day minimum and usually booked out 5 months at a time.
My gross per month before rent=$3750
My net after paying $1350= $2,400
$28,800 per year
Minus other expenses snow removal etc $4500 through the year give or take $24,300
Not bad for not having to own anything and barely need to spend and ridiculous amounts of money. I also own 2 multi units too but I hire a property management company (I don’t play landlord? Sorry but I bet you don’t make $65k a year on your rental you own. Want to know how I know?
Post: Wholesaling to Hedge Funds???
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @J Scott:
I've sold a bunch to hedge funds recently, and your two options are:
1. Put the deals on the MLS and let the agents representing the funds (and other big investors) find you;
2. Send the deals directly to the agents (who you can find by doing #1 above on earlier properties).
They all have different buying criteria, different contingencies, different inspection practices and requirements, and different requirements for their purchases. For example, the last sale I did, they required that I remove the brand new stainless fridge because it didn't have an ice-maker (they didn't ask for a credit or a replacement...just that I get it out of there before closing).
Most of them are looking for 7-10 days of due diligence, so that could make double closing difficult, but I imagine they'd do it (I've never tried).
Yes double closing does work- I’ve done it many of times
J Scott is also 100% correct. You’re better off, unless you have a background as an agent like myself, to have a RE salesperson rep you and transactional funding is key
Always check their criteria. They have funky requirements that, no matter how petty they may seem, would stop a transaction dead in its tracks. Do some research and you will be fine. They are not judge jury and executioner- Sell yourself to them and their will know your worth. My advice have an experience investor or Realtor guide you for the first couple of transactions.
Post: Wholesaling to Hedge Funds???
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @John Jackson:
John A. most have a number of agents that scrub the MLS, then they plug the numbers to look at yield and/or cap rate.
They don't like assignments, so if you have a deal you'd likely have to close on it first.
John is 100% right! They hate assignments and unless you know someone within, they will cancel their closing altogether if an assignment is executed You cannot get this far anyway because, like the REO's, the initial PSA is already stated as "non assignable" What wholesalers do in this scenario is conduct a double Close or double HUD (aka). You cannot simply close with buyer (like all gurus say) then turn around and pay seller then transfer title to buyer- That is ILEGAL
A way around this in case you cannot get transactional funding
- Have your closing attorney draw up a Promissory not in submission to the buyer in which you will secure your equitable interest within the contract to the buyer... Why do this? Because temporarily for about an hour you will be making the buyer your lender to close out your A and B transaction between you and the seller as if you would with a REO Once that is done, you with solidify the transfer with the buyer (B and C) and tell him thank you for funding your A and B side. The spread left in the escrow is now released to you.
You do this same method with hedge funds
Post: Cody Sperber's Deal Automator
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
I have purchased and utilized the deal Automator and can give you at least my side of what I experienced. Disclaimer in no shape or form am I am representing the deal Automator, clever investor, and/or the marketing of Cody Sperber by any means I have purchased and utilized the deal Automator and can give you at least my side of what I experienced. Disclaimer in a no shape or form am I representing the deal Automator, clever investor, and/or the marketing of Cody Sperber by any means.
That being said
I purchased a beer water meter back in May 2019 prior to that I was making 1 to 2 deals every other month with Wholesale in assignment contracts double clothes and what have you. I kept seeing Cody pop up and squeeze page And webmails all Over the internet and had to see what’s up!
The deal Automator I noticed was a big push for this company clever investor on by Cody’s Sperber . After seeing the success potential the marketing sold me. First complaint I have about the system is there smoke and mirror gray and white disclaimers they almost contradict him selves not with the services alone more of the membership payment etc.
What I mean by that is they lure you in with the free trial, however, the free trial doesn’t give you near enough time to set up a website squeeze page your profile couple of direct mail mailers and any other marketing tool there is on the Automator. That is one gripe I had, but the last.
The deal Automator to be 100% honest with all of you is whatever that individual makes it to be. It could be the most horrible system in the world to somebody or a lifesaver to a wholesaler and or REI not only does it come with all the marketing tools one needs to be successful in the business but also has completely hundred percent free no gray white or all invisible writing training courses in depth and to the point. Now I can't speak for Sperber on his wholesaling tactics personally however his deal Automator is not so bad people. I mean, I'm not gonna run the hills and cities claiming it's validity however I wouldn't give it one star. My advice to people Who are interested in this automation is to get one or two assignment wholesaling deals under your belt or at least five to $10,000 of profitable flips before joining that being said it will give you disposable income to throw in invest into a system in which you can market however if you haven't made not even one deal at least get one under your belt through you know Facebook channels YouTube craigslist your local tax liens whatever you can do at least get one even if you have to co Wholesale with somebody
Truth to the matter is people are in constant search for that get rich quick automation tool where they could have little or no experience and just generate money and that is entirely possible however you need to perfect the craft of marketing or hire somebody who can. My advice if you could build a small team with payment of 50% or some sort of percentage of your spreads as payment .8 director of your marketing campaigns it will be that employees job to buy things like the Deal Automator that makes marketing easier and more consolidated and less all over the place Carry what did Deal Automator does is take all tools you need as an REI and consolidated into one platform
Post: REO, double closing process?
- Real Estate Agent
- Boston Ma
- Posts 31
- Votes 31
Originally posted by @Wayne Brooks:
@Alex Bezu I realize you are an attorney, but you are dead wrong on that. A double closing, 2 different HUDs are required, as the contract can Not be assigned. The buyer on the HUD from the bank must be the buyer named in the original purchase contract. REO purchases specifically prohibit assignments.
You are 100% correct! I am an attorney in Massachusetts and with all due respect to Alex, you lost me Sir and I’ve been doing transactions since 2008. As a matter of fact (and no offense to anyone) every person above is 100% incorrect. I seen one comment mentioning “assignments” then he’s referring to getting hard money lender”? No idea little mixaroo.
Real quick cause I don’t want wrong info on this site for I care about everyone trying to make it in RE. That also goes for the guys above, please don’t take me words as a insult gents. Just you are wrong.
In any event REO and double closing- YES AND NO- It depends. Real quick I don't feel like typing look below
You = A
Bank= B
C= End Cash Buyer
AB = Banks Closing Attorney
AC= Investor Friendly Closing attorney
A sends offer to B- B accepts whoohoo
Before signing the A and B PSA A will have to review and sign a addendum that AB issues prior to official acceptance of offer
A MUST REVIEW THIS ADDENDUM VERY CLOSELY - It will def day SHALL NOT BE ASSIGNED. But what your looking for is a statement that spells out “Upon Purchase New title holder must live at property for 1-2 years prior to selling themselves” (verbiage differs in some states but all the same)
If AB addendum says that- back out kindly from the transaction. If they try to “sell you” on it simply say you want that verbiage taken out- If they decline back out and go home.
However if it doesn’t have that verbiage (psssst I would say little less than half the 50 states don’t, accept the addendum and get your cash buyer on the line
Dont say anything to the bank about your end of deal it’s nunya
B then meets C and C initial contract along with marked up Purchase price- “CONTINGENT OF BANK CLOSING”investor friendly attorney, if asked properly and make sure you have a decent rapport with them, ask if you can utilize the proceeds at the banks requested title company. If the lawyer or investor friendly closing company are “investor friendly” they will let you close that day and let the buyer know exactly what’s going on and that everything is solidified.
Take $$$ from proceeds to close with B the bank then gives you the REO PROPERTY
YOU THEN (preferably same day) plan on doing some back and forth but worth it. Solidify B C Contract with title transfer of prepaid PSA
You get the spread held in escrow
Buyer walks Away with nice REO investment
Bank is just happy they lessened their inventory