All Forum Posts by: Heather M.

Well, @Heather M. I agree with Don. I read this thread, usually I don't read all the posts as I've found many contribute just to add to the forum folklore.

Most people on this forum have no clue as to what real estate or real property is, the difference between real and personal property. That especially goes to the marketing type gurus! 

In my course at GREA (which is free BTW) I explain the difference between real and personal property, that is where REI types need to begin.

I don't mentor or coach or have any course for sale, I really don't need to do anything, I'm retired and did so around 52, mostly because real estate was really good to me. Read my profile, it's not all there, but the highlights will tell you about my experience. Just saying, no dog in this fight, it's all about teaching RE to help those really interested in our industry. If everyone on BP sent me a buck, it would just be a tax problem I don't need. 

3rd page of a good thread with an intelligent title that is different, that means more folks will probably read it and respond, so, here it goes.

I don't know of any war between nations that started over building cars or any widget, many have started over land disputes or territories. Now why is that?

Because land is scarce, we can't make more dirt to live on, all personal property can be reproduced, we can make new cars, shoes or apple sauce. Land is unique, no two parcels are alike. 

Most on BP have no clue about real property, we never talk about the social aspects of a home, never talk about what housing means to the community, the tax revenue generated, the amenities government provides, the security that shelter provides or any of the basic needs we reap from a residence. 

That's why real estate is regulated, laws and ordinances are put in place to protect the concept of real property that doesn't apply to personal property. We don't treat real property like personal property, because it can't be replaced. 

By the time we are 21, we've been exposed to business transactions, give a few bucks and get a hamburger and coke, buy a car, purchase shoes or clothes. We've already dealt in personal property, we understand selling for a profit. 

When we take this experience and attempt to apply the business of trade to real property, as most do, they fail to apply the concept of real property and the unique nature of real estate, the difference that the estate carries socially, the importance to a community, the government of society, the functions that real property plays in our security, health and well being. 

Nowhere in our Constitution is there any mention of the right to own a car, but real property is addressed and the rights we enjoy from ownership. Land ownership is sacred and owner's rights are protected. With those land ownership rights also comes responsibilities.   

So, when you have folks with a marketing background that deals in widgets they are attempting to apply personal property "thinking" to real property, treating a home as a widget or dealing with it as they would a car you have a problem. That is totally inappropriate as they ignore the social, governmental aspects and legal rights of land ownership or real estate principles. You are not dealing with plastic houses and hotels on a Monopoly board!

When you are dealing with the average American, Harry Homeowner, you're most often dealing with their largest asset, it's generally the biggest investment they have made.  This is one of the biggest reasons that every state has licensing laws, they are in place to protect the public ensuring that those dealing in real estate have the knowledge and background to deal with the public responsibly.

At law, the rights of an owner are favored over a buyer, a lender is favored over a borrower and consumers are favored over a dealer. 

Ethics has been mentioned in this thread several times. Professional or business ethics are the written or unwritten rules of how we conduct business in an industry. (BTW, investors are not an industry, they deal in a niche of the real estate and finance industry.) Business ethics are the standards of conduct expected within an industry, these standards are not one person's beliefs or point of view, these standards are adopted by an industry over time, with considerations given to legal, social, economic  and governmental aspects of that industry. Conduct in one industry may be acceptable but not in another industry. 

Again, revisit the difference between real and personal property, what may be ethical for a car dealer may well be unethical in real estate and usually is. "Puffing" on a used car lot is almost expected, it is unethical and can be illegal in real estate.

While we all have varying degrees of personal ethics they may not be in line with industry or business ethics. Doing things that are illegal is unethical, suggesting others do something illegal is unethical as well. Deceiving another party is unethical in real estate. Ignoring ordinances, rules and laws is unethical conduct. Intentionally entering into a contract knowing your intentions and ability to perform are contrary to what was contracted is unethical, that's just lying and deceiving. You can only be an ethical wholesaler if you can pass through all of these gates, but you can't as your guru and wholesaling coaches teach it. Marketeers can put lipstick and pour perfume on a pig, but it's still a pig. Wholesaling is taken directly out of the personal property play book, be the middle man a "straw-man dealer". (BTW, I've often said that advertising is the art of deceit).

We hear the lame justifications of "sell the contract, not the property", bottom line, you are using contracts as a "listing" to facilitate a sale for a property owner. Study the "Laws of Agency" and the different types of agencies in business transactions, how an agency relationship can be formed. What constitutes an agency relationship in any business transaction? Like it or not, if you're in the business of wholesaling you are taking on an agency relationship.

Understand too that when you sell a contract, or any asset, there are implied warranties that what you're selling is merchantable, that the value is based on condition and usefulness in many ways. Now, if you entered into a contract without the ability or intent to perform, your contract is voidable, that means it is flawed legally, you're attempting to sell damaged goods and without disclosure of your ill conceived contract you created. That just bumps fraud. 

Is your business based on selling voidable contracts? If you're a wholesaler assigning contracts for a fee, yes you are! And some want to talk about ethics!

For most of our youthful members here on BP, all of this is something they don't want to hear or recognize. Desperate people do desperate things, especially when they are seeing dollar signs. The gurus are playing on your desperation, you just don't see it. 

Well, now you know a bit more, who do you want to be?  :) 

@Heather 

@Heather M.undefined

I'm sorry if you thought my post was hostile, certainly not meant to be, it's short and to the point and I left out a lot of points about wholesaling. 

An agent told me not long ago they had a big problem, she was the listing agent and her buyer accepted a cash offer. Well, the deal fell through, the buyer didn't buy. I don't know if it was a wholesaler or who it was, doesn't matter, they didn't buy as agreed.

Usually we'd say no big deal, just say next.

It's more about what the sellers did and I've mentioned this before.

Sellers thought they had a cash offer, money in the bank deal and so did the agent to a 90 day closing.

The sellers cleaned out the house, moved to a rental to purchase it later. They even put their high school kid in another school! They had also moved stuff to storage, had a couple nights at a motel between moves.

This is not uncommon for a seller to do prior to closing, they prepare to sell and close as agreed. 

Now, consider the stuff a wholesaler does making a seller believe they are buying, anyone see the point, what can happen when a seller is mislead?

To say that seller was mad is an understatement and they got an attorney!

I do know it was a cash offer and the buyer did not have the ability to buy it, sounds like a wholesale operator but again, I don't know who the buyer was.

I do know the seller sued the buyer, the agent was afraid she was going to be next, that was her problem. 

I do know the buyer lost and it wasn't for the price of the house but for damages, financially in thousands of dollars as well as for the emotional side, changing schools along with the hassle factor. I was told it was $100K plus attorney fees and costs. Also included damages for taking the property off the market.

Under the circumstances the seller acted prudently following what they needed to do. This buyer knew they couldn't buy and I have no idea why they made the offer, I was told they didn't get the cash they were expecting, (lame excuse). Doesn't really matter. 

Newbies getting into real estate need to understand what all goes on after an offer is made. You can cause a seller a financial loss, this is a "Tort" look that up and study what "tortious conduct" is.

This is just part of the unethical side of wholesaling when offers are made by those who don't have the ability or intent to buy as agreed and disguising their true intent. 

The agent escaped the judge and the broker kicked in to make them happy, even when the agent was really not at fault but did fail to properly advise.

More later, gotta go, good luck :)        

A quick look on Zillow showed me a 2/1 at 1218 Burke St. in Kannapolis offered at $39,900 that's been on the market 47 days.  There's also a 3/1 at 1205 Woodlawn in foreclosure at the same price that's been on the market a month.  New listing at 1002 S Ridge Ave for $30k.  I don't know what your rental market is like down there for these types of places, but that's at least 3 that you would be able to put 20% down on and maybe work with the seller on seller financing.

None of these may work out either, but if you can work out seller financing on a property, you can avoid the wholesaling gig altogether.  Real estate auctions also appear to be popular in your area.  You may be able to scoop up your first rental that way.

@Heather M. Interesting! Our stories are very similar in regards to investing. My ultimate goal was to be a buy and hold investor. I felt like wholesaling, then rehab & flip were going to be my path to get to B & H. I experienced some of the same feelings when wholesaling. I also did not want to quit and questioned whether I should after 5 months of direct mail and driving for dollars. 

Wholesaling allowed me to better understand my market which includes the metro Atl area. I began to see that it just wasn't a lucrative time for that aspect of REI. Are people out there doing deals, making money, etc. ; of course they are.

My suggestion would be to first, trust your gut instincts. Work on analyzing deals in the area that you plan to buy. Also, continue to save your money so that you can make that down payment and have the reserves that you need. Continue to learn about B & H investing, but don't go overboard because experience is the best teacher. However, you want to know enough that will help you make wise choices (that's prob a bit vague). 

I became interested in REI in 2014. Mostly did some learning and joined my local REIA the first year. Jan 2015 is when I started wholesaling and stopped in May. I am scheduled to close on my first property next week (praying that all goes well). In hindsight, I wish I had someone to advise me to just work on saving my money and prepare to B & H. I have a FT job and make sacrifices so that has been helpful for me. Plus, in my area I have only heard experienced investors confirm that B & H (vs wholesaling) is the wealth builder if that's your goal.

Good luck!

Heather Macaulay first off don't be discouraged about anything! You said you don't like wholesaling, not your quitting real estate all together! You are always learning even if it is learning what you don't want to do. Pe patient! This business is built over years, not months!

If your long term goal is to buy and hold, then keep saving, keep learning, look for seller financing with lower down payment possibility, try to find private money and look at a fha loan around 3.5% down(that would have to be owner occupied for a little while) etc.

I am not saying to quite wholesaling, that you have to figure out for yourself! But I am saying that I am a firm believer that no one should have to do things they hate, life is to short and money is not worth your sanity! Figure out exactly what you want and exactly why you want it, and move for it everyday! You will do great!

To your success!

One of the main points often missed ( because it is intentionally misstated by those selling mentoring type services) is that wholesaling IS NOT INVESTING, it is a JOB,  or service business at best.  I often run into people who somehow think being a real estate broker is drudgery, but being a wholesaler is heaven.  I wonder if you added up all the income earned by "wholesaling" real estate, and divided by the total number of hours spent in this pursuit, how much BELOW minimum wage the amount would be?

I've done all I can think of in real estate with the exception of development; options, foreclosures, probate, rentals, flips, wholesales, notes, seller carry (both as the seller and as the buyer), subject to and a few more that I can think of at this moment. 

To me, flipping is THE BEST education you get in real estate and I really think there isn't much risk... with the exception of you paying too much and/or over rehabbing the house. 

A great flipper is nothing more than a project manager who overseas all aspects of the project;

Wholesaler or agent finds the deal and handles the negotiation & contract.

Private or hard money lender funds it.

If you're truly "broke ***" then a partner could put up the gap funding and rehab costs/holding costs.

Contractor rehabs it.

Agent/Broker lists it and handles that side of the paperwork.

You, as the PM, make sure everyone does their part. The more rehabs you do, the more you start learning about contracts, estimating ARV, estimating rehab costs, you'll start putting together your own deals, you'll start looking at niches where you can find deals and learning how to market and negotiate to those niches.

Rehabbing is where I started. I didn't know A THING about doing real estate. I bought a property of a very reputable wholesaler and then asked a buddy for a referral to a contractor. I funded with a HELOC, but could have used a hard money loan and credit cards. My neighbor is an agent so I had her list it. I just made sure all the pieces came together. I made $26,000 on that first deal. I kept buying from the same wholesaler and he slowly taught me about title trusts and contracts. I kept copies of all the listing and sales docs so I could sell the houses myself (I was in fact licensed at the time, but still knew nothing about paperwork because I had never sold a house or even worked one hour as an agent. I got my license only because I took all the required classes at the local community college.)

After dozens and dozens of rehabs I became more interested in finding and putting together deals than I was in fixing broken houses. Now, I rarely do a rehab. I actually wholesaled a house this morning for $1,500 only because I absolutely do not want to get into another rehab. I basically reverse bribed my buyer to take it off my hands.

That sounds terrible. I hate sales and wouldn't want to do it. Here in my market, $12k down plus a couple grand in closing costs will put you in a rental property. My opinion is that if you were to do some part time job for that 8 to 10 hours, or take on more clients in your regular business and save a couple grand more to buy a rental that cash flows well, you'll be able to build the wealth you want, albeit probably much slower.

Also, one of the head honchos here at Bigger Pockets has a book called "How to Invest in Real Estate with Low and No Money Down" which gives a ton of ideas on what you could do. I think I paid like $30 w/ the Audio Book and physical copy. 

I haven't read through other responses, so if I'm repeating something that's already been said, I'm sorry.

@ heather Macaulay

Then dont do it. Quit and get out of the business. If you're too scared to make a decision with your money then put it into a bank CD and keep going to your 9-5.

I don't know if this deal works (numbers/location wise) but in a NY min I found a duplex in your area that allows you to house hack. So you either want to buy and hold or you don't.

http://www.realtor.com/realestateandhomes-detail/2...

so either .... or get off the pot.

Make it an awesome day!!