All Forum Posts by: Jeff Joachim

Congrats on getting started @Cam Outlaw. You have been given some really good advice so far. I'd also read "5 Simple Commandments All Real Estate Wholesalers Should Live By" by Ken Corsini. 

Don't spend a bunch of money with gurus. Bigger Pockets will save you a ton of that money. Podcasts, blogs, and simple questions posted on forums will help tremendously.

Best of luck, I'll be rooting for you here in Orlando!

Chances are if you have done a few wholesale deals in your day, then you have heard someone gripe about the dangers of dealing with wholesalers.

Typical comments from someone that has been burned from wholesalers in the past include...

1. "Wholesalers try to make more money on the deal than I will" - Disgruntled End Buyer

2. "You guys just tie up properties and sell them for more money...anyone can do that"   

-Disgruntled End Buyer and Real Estate Agents

3. "Your company will just tie up my property, never sell and I'll be left holding the bag just like the rest of them" - Disgruntled Homeowner and Real Estate Agents

Sound familiar? Reminds me of my dating life back when I was a single gentleman on the prowl. "All men are dogs"...."Guys just want to get in my pants"....etc.

One of the comments above was inspired by something I heard just this morning from a potential client. While I enjoy wholesaling here in Orlando, Florida, I do much more than just wholesale. I am a licensed real estate broker that sources deals from different channels, some of which happen to be wholesale deals. 

Seems like when you try to run a legitimate wholesale business, there are many misconceptions of what good wholesalers do. Largely in part because many wholesalers don't follow the "5 Simple Commandments All Real Estate Wholesalers Should Live By" as outlined by Ken Korsini in a recent blog post.

When I started my company here in Orlando it was to help change the industry for the better and actually deliver good deals to buyers in need. Since one of my functions is as a wholesaler, I feel like it's necessary to spread the word about having good wholesaler etiquette.  

I can't possibly be the only person that does wholesale deals that feels this way...or am I?  

@Aaron Breiding I normally let folks know that I am shopping around and I am looking for the best terms. Most people will respect that. I've always been cautious to maintain good terms with the lenders I decide to pass on. You never know when you will need them to bail you out of a deal, if the other folks are unreliable. 

@Aaron Breiding Since I work with a lot of investors, I am often courted by hard money lenders much like how realtors are often courted by mortgage brokers. My clients here in Orlando, Florida typically purchase homes with zero inspection, without contingencies and need to make sure when they put a deposit down a property they have a reliable hard money lender that will fund on time. With that being said, I have witnessed horror stories as other agents in my office have had hard money lenders promise to fund on time and the day of closing back out of the deal. There are multiple reasons for this happening. 

The majority of the time when deals don't close are because:

1. Sometimes private lenders over commit and do not have enough capital to fund deals

2. They find out the investor presented bad comps then decide to back out after giving an approval. Aka wholesaler inflated values to get a sale.

3. The deals dont fund on time because the lenders aren't given paperwork on time.

4. Many hard money lenders say they can close within a short time frame but really take longer. Most lenders say they can close in a week here in town, but it really takes about 10 to 14 business days.

In the past I've had success by doing the following

1. Shop around and get commitments from different hard money lenders. 

2. Make sure you have a specific property in mind when talking to lenders. Have them do as much of their underwriting process before contracting on the property as possible.

3. Get referrals from folks that have actually had a deal fund with hard money lenders.

4. Make sure you stay on top of them to ensure they fund on time. I normally tell them I need to fund sooner than I really need to. If it is closing in 10 days, I tell them that I need to close in 8.

5. When you find one to work with, keep two on deck as a back up in case something goes wrong. 

6. Tell a friend if you find a good hard money lender :)

@Tiffany Ward It depends on a number of factors. 

The size and scope of rehab can greatly increase your holding costs. Many times when you get started on simple projects, they can develop into more complex rehabs. A property needing significant rehab, may likely have some hidden problems not readily visible to a new investor. 

Most investors I work with here in Orlando will make sure that the risk is worth the reward. In particular they typically like to make sure that their profit will be equal or greater than the amount of rehab they put into a project. For example if a home is available for $50k with an ARV of $170k it may seem like a good deal. However if it needs $70k in repairs, most investors I know will pass because that would only be a $50k profit. If the rehab costs exceeds the profit, I'd look elsewhere.

I typically start new investors out with basic properties that only require cosmetics and updating, with very little structural issues. When you start getting into mold issues, and re-configuring floor plans that is something better left to more experienced investors.

Best of luck...help this helps!

Welcome @Ethan Mackey!  I'm assuming that you are over in the Ft. Meyers area. That area was one of the top areas for distressed properties in the entire state back when I was there a few years ago. Seems like there are a ton of good deals to pick up. I wonder how things are nowadays. 

Nice...good to know @Robert Reardon. I've heard a lot of good things about the west side of Florida. How are things going for you out there?

Seems about a year and half ago there was a ton of hedge fund activity here in Orlando Florida. That has since slowed down dramatically. I'm curious BP community... are funds still buying in your area?

Interesting situation @Rod Desinord. Not all wholesalers operate in the same manner, so it is kind of tricky. A big part of wholesaling is obviously picking up properties for less than what they are worth. The benefit to the seller is that they are able to liquidate a property quickly to a cash buyer. If the seller isn't distressed and doesn't need a quick cash offer they will be offended by lowball offers from wholesalers, especially if the wholesaler isn't tactful in their approach. When I'm negotiating a wholesale deal, I just tell people what I can afford to pay, rather than go into bashing the property and telling them they will never be able to sell for more. Best of luck in your situation!    

Welcom @Cole Lehmann! You're definitely at the right place. Of course the forums and podcasts are great resources, check out the "Analyze" section for some cool tools when evaluating property.