All Forum Posts by: John Chapman

Cover it yourself and make sure it's taken care of correctly.  Honestly, while all of my leases say pest control is on the tenants, I generally take care of the issues anyway.  I cannot tell you how many times I've had it where I wished I had just handled the problem myself and paid the $75 as opposed to letting the knuckleheads handle it themselves.  Year ago, I got a house back and it was so infested with roaches, it took weeks of treatment, delayed showings, and resulted in a fried control board on the stove.   I'd have taken care of it myself if I had known.  Penny wise and pound foolish and all that.  

@Russell Brazil is right.  This is a common occurrence and given the gap in appraised value vs. contract price, if I were the seller, I'd expect you to compromise some or tell you to get lost.  You are not in a position of strength unless the seller really needs to sell and/or it's a slow market (in which case, you'd have been a position of strength all along).  If you guys plan to live in it, like the place, and don't have many other options, I'd try to work with the seller and find a win/win.  So many people get hung up on little numbers at the end, become obsessed with "winning" and walk away from good deals over a few a grand or two.  If it's a good deal in a good location, I promise you won't even think twice about the minor difference in price in several years.

@Jay Hinrichs, Yeah, everything you say is valid and fair.  I've never run into that as most of the stuff that is wholesaled to me is from people I know and I stay away from the shady wholesalers.  I'm probably relying too much on my own experience, and I agree in the example you identify, I would not feel comfortable proceeding with the transaction (both morally and legally, you rip people off like that and you're asking for trouble).  If I saw something like that after reviewing the contract, I would probably not proceed.

I'm looking at your original post, and it seems to me that it was your approach that was off.  You started off by asking what's his fee.  As you and everyone else seem to agree, that's not really relevant to whether the deal makes sense to you financially; all that matters is whether the numbers work for you.

As other have pointed out, you do absolutely have to see the underlying contract so you know what you are getting.  (I've seen them with all sorts of weird terms and those non-monetary terms can kill a deal on their own.)  I'd have simply verbally negotiated a price with him and then made it clear that I'll need to see the underlying contract before I sign. Every wholesaler with half a brain knows this has to happen so you'd get the information eventually.

I get where the wholesaler is coming from in that the ones I run into often feel like the end buyers are always trying to screw them and get mad if they think the wholesaler is "making too much from the deal."  (Not trying to start a debate on ethics of wholesaling.)  If your first question out of the gate is, "How much are you making on the deal?" then that's going to raise red flags and make the wholesaler defensive.  You're going to see the fee eventually so there's no point in raising the issue other than to improve your  position in negotiation, which is certainly not to the wholesaler's advantage.  (If you're negotiating with the wholesaler, you're probably not going to give an opening offer but then let him or her know much wiggle room you have.) 

I always try to assure wholesalers I could care less about theirs fees and it seems to help.  Just some thoughts.

This is not a good idea.  First, suing a broke contractor out of state is basically going to be a waste of time and money.  Even if you get a judgment, how are you going to collect?  I don't know collection laws in Oklahoma, but here in Texas you'll never get a penny out of him unless he has gobs of assets just hanging out there.  Lawsuit is like a three-legged stool, need liability, damages, and collectability.  Second, any damages you collect will almost certainly be eaten up in attorney fees and costs.  Lawsuits are expensive and there needs to be a lot at stake.  No attorney is going to take this on contingency.  Third, for a host of reasons, you'll likely have to sue in Oklahoma.  Fourth, if you do decide to proceed with this, you need a litigator, not a real estate attorney.  In sum, you probably just need to take this as a learning lesson and move on.  Caveat:  there may be some unique facts you didn't share, but it sounds like a typical contractor dispute to me.

Not sure where you are looking but lots of local banks lend on SFRs.  The ones I've used require LLCs with a personal guarantee. It's commercial financing so the terms aren't as great as conventional financing.  Frankly, I would transfer them back to your own name and just get conventional financing.  If you carry good insurance, you should be totally fine.  

I'm in your area. Been to a few of these. Super competitive, deals are as thin as on the MLS and, in my opinion, way riskier. Prices I saw properties going for had me scratching my head. There's probably a deal or two out there to be had, but there are easier ways of finding them. Just my two cents.

These "recession" topics are kind of amazing at this point.  Setting aside the unpredictability of the timing of a recession or its effect on the economy and/or the real estate market, every single poster who inquires about "waiting for the next recession" presupposes they are actually going to have the nerve to buck societal trends and dire economic warnings, zig when the entire market zags, and buy properties when the market tanks.  Property prices went down a lot in the last recession because everyone was convinced the entire economy was doomed and it was a very scary time to buy.  That is, very few people were buying, those that did took risk, and they were rewarded as a result.  This 20/20 hindsight nonsense ("It was so obvious that real estate was a good deal back and next time I"ll get in on the party") is delusional.  With so many people "waiting" for the next recession, I don't see how prices will go down and, if they do, it will like because it's some new scenario that has everyone terrified about real estate (including, most likely, new investors) meaning that, once again, it would be a very small number of people buying.  Just my two cents on all this recurring "waiting for recession" question.

Oooooh, um, yeah.  I'm pretty familiar with that area. My partner and I picked up a lot in Polytech, which is next door to Stop 6 and nicer, where we were going to build a new home.  Pulled out and dumped the lot because my partner had major issues with theft at another project he was working on in the neighborhood.  We basically washed our hands of Polytech (Stop 6, we wouldn't even touch).  I say all this because these neighborhoods are really street to street. Yes, there's a lot of overall activity, new construction starter homes,etc., but I just don't see it becoming a major re-gentrification area where fortunes are made.  I think these types of neighborhoods will go from scary to safe-ish.  I wouldn't want to live through that process, though, and I wouldn't bank on it happening anytime soon.  The plan that @Nick B. points out is pretty cool but whether it's going to be accomplished in the way that the City hopes, however, is pretty speculative.  Just my two cents.

I'm a local attorney and I can tell you that eviction is a very easy process and does not require the use of an attorney.  Most JP Courts in Tarrant County have  eviction forms on their websites with very easy instructions.  You see all sorts of landlords doing this process themselves.  Good chance you won't even have to show up.  90% chance your tenants will bail before the hearing and 95% chance they will not show up.  

As for recuperating lost rent, I'd give up on that idea.  Collection laws are not good and the tenants are almost certainly judgment proof (if they had money, they'd probably pay the rent).  Most likely the best you can hope for is to get them out cordially and hopefully minimize the damage to the unit.