All Forum Posts by: Jeff C.

It seems like everyone on earth is trying to be a wholesaler right now, and 99% of them have never done any property investing and have no idea what constitutes a deal. They don't know how to calculate ARV.. they don't know how to calculate repair costs.. and they don't understand the holding costs and frictional costs involved with reselling a property.

If you're producing true deals, you will have no trouble finding buyers. I'll buy just about anywhere if the money is right. Feel free to drop me a line!

@Chuck Klinger 

From your own profile:

"If you're a wholesaler who wants me to shoot out dozens of lowball offers I will do so at $200.00 per offer for the first 10 offers, $100 each thereafter, as each offer takes about 2 hours of my time."

How dare you send out low offers and conspire to "steal equity" from sellers?! I guess it's alright as long as you get your beak wet. ; )

Turns out that everyone in a transaction is looking after their own best interests. Even you! Shocker.

The margin is slim because of your high cost of funds and the fact that your commissions paid are too high. Myself, I would do this deal cash, list for a low flat fee (paying 2.5% to the buyers agent), and make twice what you're making on the same deal.

Whatever I've offered as the cooperating broker commission % on the MLS... which is typically 2.5%. It should be noted that the "person who brings me a buyer" is invariably a licensed agent.

It's simply an offer. Take it or don't. The power resides with the seller. If your client had accepted that offer it's not the buyer who would have screwed them, the seller would have screwed themselves. What happened to adults taking some responsibility for their own actions? It's quite obvious that the buyers do not work on behalf of the sellers. At what point is ANY degree of due diligence the responsibility of an adult in a transaction? If they had accepted a very low offer, they would have been simply paying a convenience fee for their own extreme laziness.

The real complaint agents and brokers have regarding wholesale transactions is that they aren't involved and collecting commission on them. I can't help but notice that one of the loudest mouths in this thread touts himself as a buyer of distressed properties. I'm quite certain he offers the sellers absolute full retail, so as not to "steal equity that belongs to the seller". It makes one wonder why he might target distressed properties at all..

I've never done any wholesaling, and I've never bought a property from a wholesaler, but any grumbling I have about them picking up great deals just stems from my jealousy that I didn't get there first, and I'm sure many other complainers are chewing on the same sour grapes. Making someone an offer is not robbery. Buyers do not have a fiduciary duty to sellers. Sellers are obviously entitled to simply say "no". If the seller has a better offer they should take it. If they don't even explore other offers, that's their own failure. 

I rarely ever achieve that kind of cash on cash return (I don't utilize any leverage in the deals), but I'm able to turn the money roughly twice a year and approach that figure annualized. If I held out for deals here that would return me 25% I'd never do any. The relatively low resale prices here mean that rehab consumes a more outsized percentage of the value of the property. Unfortunately it takes the same amount of effort to paint a 1500 square foot house that will ultimately be worth $200,000 as one worth $1.2 million. Still, somehow or another I manage to squeeze some blood from this stone every year!

 A lot of things can't quite be done room by room. You can't just start flooring in a bunch of different rooms, come out into the hall and see where things meet up. Its also really inefficient. When your guys are painting.. lets just say ceilings for example, they need to be spraying the whole house. Not setting up and tearing down again room by room... and who wants workers coming in and out of a place they're renting? A lot of the construction process is loud (ever air chisel out a house full of old tile flooring?). A lot of the construction process is stinky (some of the lacquers and epoxies we use stink to high heaven). At times the water will have to be off. At times the power will have to be out. Trust me, just clear the place out, get as many guys in there as you can, and knock out the project.

 I buy auction properties all the time and almost never get inside beforehand, but I buy in areas I know. If you don't know what your resale price will be within $50k that's a pretty big deal. I'm very rarely off by more than $5-10k. Of course the two big questions are how much can I sell this thing for, and what's it going to cost for me to get it there? If you don't know either one of them, that's a problem. If you make up a worst case scenario list of repairs, do you KNOW what you can get those done for? You need to. Also, opening bids mean nothing. Don't get attached to that number. What you need to know is what your maximum bid is.