All Forum Posts by: E. Jacobs

I'm sure this has already been addressed somewhere, but my search came back with no results for whatever reason. Anyways, when wholesaling, is the most you can offer someone on their house equal to the balance on their mortgage? For example, you have a house with an ARV of 100K and you want to offer 65K, but the mortgage still has a balance of 75K. Does this mean that the house is not wholesaleable? (is that a word? lol). I'm guessing you can't work with it. Can you pass it along to a short sale investor if it qualifies for one? Do you offer to negotiate a short sale with the bank for a fee if the seller is in default? Or do you ask the seller in advance about their mortgage balance(s) so you never get involved with properties like this in the first place? It seems like this can be very limiting for wholesalers, especially since so much equity has been wiped out in recent years.

From what I've gathered in other threads here, yes, you should definitely be upfront with the seller about your intentions. In fact, it should be written into the contract so that there is absolutely no confusion about what you are doing. You don't want the seller thinking you are taking advantage of their distressed situation and getting rich off of their misfortune when they see the assignment fee at closing. Tell them you wholesale houses, you will be finding an end buyer, and you must be compensated for your time, risk, and expenses for running your company (probably mostly marketing). In order for this to happen, they must be willing to sell their house at a steep discount, but you will find them a buyer fast and without financing contingencies so that you can close ASAP. They won't have to repair their home or incur any other selling costs for your services. It SHOULD be a win-win for both parties. There's nothing to be secretive about here.

Thanks- give me a PM or reply here next time you're doing a promotion like that. In the meantime I'll keep doing my homework!

Best wishes,
Eric

Thanks Doug! I kind of figured that out for myself last night after pulling up comps on some of the properties there. One person had their condo listed with an ARV of 220k, but at least 5 other condos in the same development had sold in the last year for 80-120k! No wonder everyone passed up that deal :crazed: Maybe a free month as a premium user would let me see the more interesting deals that this site has and see how legit it is before making a financial commitment ; ) I'm sure there are great deals out there, but I'd like to see a couple first so I know what I'm paying for!

Hi,

I just signed up for a regular membership today on myhousedeals with the hopes of finding some great property to flip and also for posting my own wholesale properties a few months down the road. However, I am slightly reluctant about relying on this site. I find it hard to believe that a property with an ARV of 220K that needs 15K in repairs and is being asked for 50K (example from a recent posting) has not been snatched up within 2 weeks before I gained access to it. This is being offered at 22% of ARV. Everything else I have read on this site has lead me to believe that anything from 50-65% makes for a good deal. Why then, is no one biting on what appears to be a no-brainer? There must be something more than what is posted that has stopped people from taking a deal like this. I'm not discrediting your website, Doug, for it is a great idea and very well put together. However, I believe I am justified in being skeptical and I'm merely looking for some kind of explanation as to why properties with such great profit potential are being passed up on. I feel like if all the "premium" investors have passed up on these opportunities, then I must be playing the fool to think they look good.

Looking forward to a response!

I'm going to have to second that!

Thanks, Guy! That should be a great resource

Thanks everyone for some excellent advice. Sage, I especially love what you have managed to do with your GC. That sounds like a great relationship and just might be exactly what I need to get started in wholesaling and learn the ropes of rehabbing as well. Nationwide, I agree that would definitely be bad practice and would spread a bad word throughout the local contractors about my business. If I called upon a contractor for an estimate, I would pay them for their time. However, as Sage suggested, I am going to be thinking of other incentives that I can use in order to avoid these costs and pay the contractor back in ways such as first dibs on free leads and referrals to both investors and owners.

Correct me if I'm wrong, but there should be no conflict of interest because of the fact that the agent never had a listing agreement in the first place with the distressed homeowner. As Mitch said, the agents will shy away from a short sale because it is not worth investing time and resources into promoting a property in which there is great uncertainty about whether or not the bank will allow it to be sold and for what price. Therefore, after the agent has told the distressed homeowner that there isn't much they can do to help, there is no fiduciary duty, and in fact the agent may be HELPING the homeowner by later on discovering a buyer who may be able to free that owner from their upside down home. Even if the agent knew that a wholesaler would be interested in the property when the distressed seller first approached him/her, the highest price the agent would be able to achieve would be just that- a wholesale price. I'm not sure how this all works in practice, but that's how I see the situation. I would of course love to hear arguments going either way though because my only goal on BP is to gain objective knowledge to help me succeed in REI.

Thanks Ali, that sounds like a good idea. So I should ask if any of the agents market wholesale properties (hopefully to investors who buy with cash or private financing) so that I will have access to his/her buyer's list and eventually make it into my own buyers list too?

Mitch, your idea is interesting but I'm a little confused. Would you mind explaining a little more about what you mean by "You will then ask those same agents, provided you get the short sale approved by the lender, to find buyers for your EQUITY, not SHORT, sale." Are you saying, the agents will not be interested in handling a short sale (because the bank might pull out at any time), so I would negotiate the short sale with the bank, buy the property, fix it up?, then have the agent who gave me that lead take the commission on finding me an end buyer for market value?