All Forum Posts by: Account Closed

I'm confused on the refinancing part of this strategy.

For example, with obviously hypothetical numbers, you find this situation:

Purchase: $70,000
Rehab: $35,000
ARV: $150,000

So, your total investment is $105,000. You rent it out 6-12 months (however long it takes to be able to refinance), and the bank offers 70% of ARV ($150,000), which is $105,000.

This may seem like a dumb question, but what is the benefit in this? You were originally in the hole for $105,000. The bank pays back that, but you're still in debt because it's taking another loan to pay it. It's like paying off one credit card with another from my perspective. What am I missing?

Correct. That's how I would go about a deal with a wholesaler. And the time it takes to actually close on the property depends on a number of factors. No two deals are going to take the same amount of time to close, each one can be effected by title issues, the seller, etc.

@Cal Ewing, don't give any money to a wholesaler without seeing the property yourself unless you are experienced enough to make that call. If you give a wholesaler a $2,000 earnest money deposit that's nonrefundable, it is his to keep even if you go look at the property and realize it's not a good deal.

Don't worry about a deal passing you. There are plenty more that will come and go. Don't rush into something without doing all the due dillegence. Before anything, run your numbers and make sure it's a good deal before you pull the trigger. If the numbers make sense, go for it.

I would take a property you feel strongly about and like I said, run the numbers. Then, run them again. Get an ARV you are confident with. THEN, go look at the property to assess damages. You should know what to work with as far as rehab costs from there. Only then should you talk about going through with a purchase.

And also just a heads up, a bunch of wholesalers are newbies. Wholesalers in general get a bad rep for a bunch of reasons, but if you can find one that's completely legitimate, STICK WITH THEM. Don't just trust any deal thrown your way. Some will literally have a property under contract for $3,000 less than market value and want to assign the contract over to you for a $5,000 assignment fee. I'm serious, these things happen. But again, wholesalers can be super beneficial, so don't let me scare the idea away from you. As long as the numbers all make sense, go with it. Don't rush into it by any means, but pull that trigger when it makes sense!

Bigger Pockets podcast. Really, guys. If you haven't listened to them, you are really, really missing out. Especially if you're new to everything and just need some advice, they are just... *Brandon voice* AWESOME.

I've listened to other real estate podcasts, and as interested as I am in this business, they still tend to be bore me. The BP podcasts are great. Very informative. They discuss stories with investors, where they started, where they are now, future plans, the mistakes made, the successes, tips, the actual ins and outs of real estate. It all comes from really genuine hosts and guests, you'll be able to listen to them for hours. I work a full time job currently and always listen as I work and jot down notes. They are just super informative.

I just felt like I should post this. If you've never tried the podcast, it's a must. No matter what experience level. To those who have already listened, they will tell you the same thing. They're on iTunes, Soundcloud, YouTube, probably anything you can think of. Great stuff, guys. Trust me. Check it out!

@Jonathan Trojan, you should post the full story on that first flip, that's a great profit! And it's good that you're still staying positive after the loss. Plenty of other deals out there, my friend. Keep at it!

Wholesalers are actually very good for you if they're legitimate. They do the dirty work of finding a deal for you. Sometimes you'll have to get 100 leads to close one deal, so a wholesaler can deal with that hassle, handle the phone calls, negotiate, and deal with the overall headache of finding that one deal. I would go with the approach Russell said: find a few wholesalers you can actually trust and stick with them.

Don't send them any information! Like Shawn said, most companies will look at your credit score and income and may pre-approve you, but asking for that sort of info via email is an obvious scam. Even if it were somehow legitimate, that isn't professional in any sense. I would go elsewhere to someone who will be more secure with your info anyways. Best of luck!

Phil is an amazing teacher and has a bunch of free content on his YouTube channel, but I wouldn't take any sort of apprentice type program from anyone, especially with those sort of terms. There's too much free content out there. Bigger Pockets has a TON of free information. I'd also highly recommend listening to the podcasts. You'll love them, they're insanely informative. Please don't waste your money on the apprentice nonsense. He is an amazing teacher, seriously one of my favorites, keep that in mind. Probably my favorite person to watch on YouTube on this subject. Still, no need to agree to those kind of terms. Just my advice.

That is an insane amount of money to risk for a first deal, kudos to you for going out and making it happen! It's also good you have a good attitude after the minimal profit. You learned a lot and still ended up making money on the deal, I'd call that a win any day. Now you know a lot more for going into that next investment! Again, great job on actually pulling the trigger. Phenomenal story and it's great you listed out all the numbers. True motivation!

As a bunch of others said, either choice could be a good investment if the numbers are right. It depends on your goals. You should definitely listen to the BP podcasts for some guidance also. It's helped me a lot with my decisions on investments!