All Forum Posts by: Jeff Cutter

I asked a re-habber how he finds his deals and he told me about this strategy. He gets lists of bank assets, which he claims is public information if the bank is FDIC and looks for houses on that list that are in his area. He checks to see if any of those houses on that list are on the MLS. He then goes directly to the bank and makes offers on those houses that are NOT on the MLS.

He would not divulge where online you find these lists. I have searched and researched and I haven't been able to locate any such list.

Is anyone here familiar with the strategy of finding deals this way?  

@Jay Hinrichs Your input is very valuable indeed. Even though my impression of the popular method of wholesaling WAS that it walked a fine line I am starting to understand the issue now. Being fairly new to the REI universe I did not realize this was a major problem. But it is really making sense to me now that some of the wiser and more experienced members here have schooled me on the legality. I have to agree with them and you 100%. I also work in highly regulated industry and if anybody tries to do what we do without the education and license they are subject to serious consequences. There really is no argument.

Personally I would rather play by the rules and not take the chance. I was already contemplating pursuing the RE license anyway so this discussion just created the lynch pin for that endeavor. In the meantime I'll study what Brian and Bill are preaching.

@Bill Gulley LOL! your last post was priceless. All very good advice and I look forward to digging into the meat of the legal issues and seeing how it plays out over the next year.

@John Thedford Thanks for clarifying the source. Will there be a transcript of that meeting?

@Curt Smith I do belong to the REIA here but just haven't been going as often as I would like...day job always conflicts. That's about to change though.

@Adam Bartomeo Yep, definitely opened up a can of worms I wasn't expecting. However Bill and John have put a microscope on the controversy and I appreciate that. They're kinda like the person yelling at you telling you there is a speeding truck coming that you don't see as you're about to step off the curb and cross the street in its path. Perception is not always reality.

@Brent Bowers Are you looking for buy and holds only (SFH or multi unit or both) and are you using a property manager for your current assets.

@Darrell Shepherd I'll be in touch with some numbers.

Excellent! These responses are golden and I really appreciate all the input.

Disclaimer: In spite of the implications made in the some of the comments I do not ever intend to deceive, lie, or have "no intention" of buying a property, or weasling out, or be involved in any otherwise unethical business transaction. I'm not looking to take advantage of anybody or "get rich quick" or follow the dreaded guru approach. I'm here to learn the legal and ethical way to pursue my objectives and goals as well as develop an efficient process in doing so. 

Having said that:

As Bill observed, I do have 2 decades of construction experience but very little knowledge of the endless constellations of legal minutiae. I'm not opposed to splitting hairs over words but I believe my time could be more productive in other areas. 

@Bill Gulley Your reply has been very helpful in giving me a totally different perspective on the "wholesaling" concept as a business practice/service. I have read and will be re-reading your blogs and the comments. I am also researching/studying the concepts you discuss and propose and seeing if they can be applied in FL. I would like to ask if you could direct me to the source involving a statement you made in comments in one of your blogs: "You can't advertise any property for sale unless you hold legal title, this is what got wholesalers nailed in FL, or if you are a licensed agent/broker." Who got nailed and when and what were the consequences? I'd like to research that.

The realtor I was dealing with on the termite house was shady from the get-go. I had never dealt with him before. I just got a call from him out of the blue that he needed a time sensitive WDO done and he would meet me at the house. From the minute I arrived he started pressuring me to give him a clean WDO and that a treatment had just been done and there was nothing wrong so I really didn't need to do an inspection. My BS detector went off and soon I found what he was trying to hide. He even brought in a fly by night pest control co. to dispute what I observed. I ultimately had to have a contractor come in and cut 3'x3' holes in the wall to prove that there was a lot of hidden damage. This was a vacant bank owned property. That realtor got very upset with me and said his buyer put down $3000 and wasn't going to get it back because of me and made all kinds of trash threats. I laughed at him and and hung up the phone. I wasn't privy to the terms of the purchase agreement but I believe that realtor was just truly ignorant and tried to save face. I've butted heads with many realtors over the years but this guy was the worst so far.

Anyhoo,

The houses I'm looking at are vacant, dilapidated and mostly out of town owners. Some are bank owned, which is another story. I have cultivated a solid buyers list (means true investors, not relatives) of which some are professional rehabbers and my intention is either turn it over to one of the rehabbers for a fee or partner with another investor on a rehab where I manage the rehab. If there are no major structural/foundation issues I'm comfortable organizing, coordinating and managing the job myself.

@Darrell Shepherd Great info and advice Darrell! Thanks for the input. I need to research the Dodd-Frank deal. A guest on one of the BP podcasts is a strong proponent of the double close, in fact she says that all she does and has done it many times. Shes not a guru either. 

@John Thedford Thanks John for directing my post to Bill and Brian. Excellent material there.

@Account Closed You must be looking to go to work for Harris, Grumman, or SpaceX?

Brian I may or may not take title to the property. I may or may not "whole sale" the property. It depends on the shape of the house and the market it's in and what I ultimately feel is in my best interest. If the rehab is beyond my skill set then its going to be wholesaled. If I can realistically tackle the rehab then I will take title. 

I don't understand this negative connotation about "wholesaling"? I'm using a common method to take a decomposing house and it put it in the hands of an experienced. Can you please explain why your way is superior to a double closing? As far as I can tell there is nothing illegal or unethical about that method. Am I missing something?

Oh excellent. That's very helpful. Thank you. I really appreciate your input.

I'm not going anywhere. I'm still feeling my way around the forums and I realize there are some people who have been here for awhile and are shotgun ready to attack. Same as any other forum I have ever been on. There's always flamers. Makes no difference to me. I know what I'm trying to achieve.

You are right about my intentions. I'm just trying to figure out a way to make the whole process more efficient in order to achieve higher yields, in an ethical way. I see an enormous amount of real estate every week on my travels and I always keep my eyes open for all the telltale signs of abandoned/distressed houses. They are all over in the nooks and crannies of all the neighborhoods I go into daily. I have so many properties to evaluate I can't keep up. 

Thanks much for the tip.

I apologize. In an effort to save time that was a hacked copy and paste from another users post and I should've removed that line.

I'm looking for a short version of Florida's Purchase contract, if there is such a thing, with a contingency clause and assignment paragraph.

Sorry for the confusion.

Of course I'm going to honor my word. My absolute intention when making an offer is to buy it either to rehab or resell it depending on which market I buy in. The implication of using deception does not apply here. 

The purchase contract is an attempt to keep both parties honest. What if the seller did not disclose or honestly did not know about a very relevant item that could be very costly to me and is not discovered until after a thorough home inspection is done. I would want an out or a concession. I don't think that's being deceptive in any way.

I just inspected a wood frame house in Palm Bay that the realtor stated nothing was wrong with it and just wanted a clean WDO. His buyer put up $3000 with the offer and upon inspection I discovered a huge active sub termite infestation that went all the way to the top plate in 3 corners of the house. Enormous damage had been done. None of this was visible to the untrained eye.

The buyer had no out in that situation and couldn't get her money back.

That is the kind of situation I want to avoid so I don't think your reply is really relevant in my question.

But if you have any good info as it relates to my original question I would be most appreciative.