All Forum Posts by: Jerome Harrod II

Ok, then how do people doing Virtual Wholesaling get paid if they are required to be at closing? They have to have someway of getting their check since they are doing business out of there area.

Also, I'm not too sure of the process or procedure required to work with a title company. How does a title company work? Do I have to create an account or the like with a title company first to use them?

I was wondering if there was a way to do wholesale deals without actually having to show up at closing. Is there a way to get the title company to handle my part at closing and just mail me my assignment fee?

I apologize for my late input, I was finishing with a college assignment.
I really thank you all for your input!
Kyand was right on the money with what she said. That was exactly what I was asking for, but now since I now know from the conversation that I have to pay earnest money as well. This has become such an invaluable topic for me, just one question.
Based on what Bryan said above, Not to divert from the main point, If the seller did sign the contract and bails then we sue for performance, how are we in a losing proposition? To my understanding that's basically the seller robbing us of our earnest money! How are we not the victim?

Alright, I want to start by saying I have never done this yet and I'm new to wholesaling, but I think I have a good plan to do it. I'm going to try to break down Virtual Wholesaling seeing as I really want to get into Wholesaling someway.

Now, Maybe this can help out others and this could be a collab work by BP. I just see no better forum post that outlines how to do a Virtual Wholesale without there being a cost somewhere. This outline is made from certain posts all over BP for local Wholesaling taken, organized, and then sifted through to get tactics that could not only work locally but on the internet as well, so I don't claim ownership to any strategies listed.

Now, I've broken down what it takes to do Virtual Wholesaling into three overly simplistic general outline:
1. Find Cash Buyers in that area
2. Find Sellers in that area
3. Make the Contract and Get Paid
That is it to it from what I gathered. Some no-brainers is to have a fax machine and a reliable number to be reached at.

Now if we were to expand on the steps listed it would look like this. Our example area could be Dover, Delaware.

Detailed Overview:
1. "Find Cash Buyers in Dover"
a. Search the area's major newspaper Ads
b. Search Craigslist/Backpage of the Delaware area for "We buy houses" and the such
c. Contact the area's local Realtor to put together a list of the latest 45 foreclosure/distressed properties for you and email them to you, then create a "bait" ad on craigslist offering this list emailed for free with your number or site. Your goal is to use that list to get the buyer information, like a trade of information. My list for your name, number, and buying requirements.


2. "Find the Sellers"
a. Use Bird-dogs too look for and gather addresses,pics, and other information on junk houses and vacant houses in the target area

3. "Contract to Check"
a.
b.
c. Have your assignment fee opened in escrow and wired to your bank account or mailed to you.


Well, this is the best I've come up with for now. Building the buyers doesn't seem to be the hard part, but I'm empty handed in the others.

Just wow, it's an Information Buffet!!

Now all there's left to do is to organize the information and create a small system so I can wholesale efficiently.

Thanks to all that posted!!

How does earnest money deposits works? As I was reading, I saw that when dealing with new buyers many wholesalers had made the buyers pay an earnest money deposit. Is this a recommended practice? Why? How much do I ask for when requiring a earnest money deposit?

The reason is that I'm looking to expand with dealing with notes as a broker into wholesaling real estate as my entry to being a real estate investor. I took Financexaminer's advice to read through key points in Wests Business Law Text book, and I feel as though have a better grasp on Laws and ethics.

Now to start, I have been researching the art of wholesale here in BiggerPockets, and boy was there alot to read and learn. I even expanded to outside resources such as the library and other internet resources to solidify information and get more perspective of wholesaling.

I feel I got a grasp on how the wholesaling process works in terms of finding buyers and the homes when dealing directly with the home owner. However, I don't feel comfortable interacting with realtors until I'm more experienced. I think I need to somehow make a script to study so my answers to those hard questions won't begin with "uhh" and end with "umm".

What I don't know are the little gaps in information, such as How do I pre-screen a buyer to see if he's good? or How do I introduce myself to a potential prospects?. Another question was how do I start wholesaling "virtually"?

I know I have a bad tendency of over explaining myself and I asking alot of questions, so to start somewhere basic, Could someone explain Earnest Money Deposits?
I mean, If you have the answers to my other questions then by all means I ask for the answers plus tips. I'm looking to absorb and retain any and all quality information, to learn everything I can to be successful.

It's not law circumvention I'm after, again Licensing is not a problem for me.
It is legal in the state of Maryland to be an unlicensed wholesaler of notes.
I simply wanted to know the differences ,if any, between brokers and wholesalers, and that is all. The way a wholesaler does things is exactly how I do things but instead of real estate I work with notes but they operate under a different title.
I was curious how it worked, because one side calls it brokering and this side calls it wholesaling. I plan on going to an attorney anyway, but I wanted to get as many as my questions answered here before I have to pay to go see an attorney for 1 or 2 questions.
Soon I was going into the real estate agents area to ask different questions about what they do.
Please understand that Im not after anything else but definitions and information.

I understand what you are saying about licensing, I had to do quite a bit of research before starting to do what I do. Fortunately, In Maryland I do not require a license to wholesale notes or facilitate the transaction of a note.

Does that mean the title is up to me?When introducing myself to a client or professional, I'm either an unlicensed Wholesale Note Investor(?) or Note Broker?

I don't know the terms well, but are "wholesalers"(?) the same as brokers? They both act as middleman in a deal right for a fee.

If not then I'am lost, I'am a newbie to the business and I just finished a rather hot topic here I started trying to decipher what I do and who I'am here:
http://www.biggerpockets.com/forums/70/topics/52242-are-note-finders-just-another-broker-

I still don't feel that I'am a note broker, especially since after reading an article from another "wholesaler"(?) here:
http://www.biggerpockets.com/forums/93/topics/37929-beginners-guide-to-wholesaling-killer-exit-strategies-pt-1-

Now,as I read that article I started to second guess my career title as broker. One paticular part of that guide that caught my eye was the "Double Closing (Simultaneous Closing) " section. Which just described my job description exactly but I work with notes instead of property!

Okay, I work with people who have notes and match them with buyers that purchases note. I go out and find people holding notes secured by real estate, after gathering the note information and finding a buyer, the seller and I sign a commitment agreement, from there the seller gives me a copy of all necessary documents, after the buyer signs and returns my NCND (Non-Circumvent, Non-Disclosure agreement) and payout agreement, I surrender all contact info to him and pass along the documents I received from the seller, and finally receive my finders fee.

This process is exactly as Eric explains it as:
Build buyers list==>Find homes==>Put under contract (your name or llc)==>Sign a completely new contract with your buyer==>Double Closing ==> Closing #1-Close with the owner of the home (No money is exchanged)==>Closing #2-Close with your buyer (Give you money)==>Give the money from the closing with your buyer to the title office==>Leave closing with difference between closing #1 and closing #2.

I have closed 4 deals this way, so I know what I'm doing but I don't know how to call it. Now, I was hoping you all could explain this to me and help me confirm my position in the note business. Am I a broker or a "Wholesaler"(?) of notes? Does this mean I change my title to investor or keep the same as broker? Getting these answers will help me immensely.

To Steve:
I see you've been reading my posts well, thank you for the input but allow me to explain how what you pointed out aren't contradictory. The situations in which the text are being used are different.

In your first point, Those who were advertising a note had the sign "No Broker calls" around their ad and those were the people who has knowledge of the industry like a professional would. In my naiveness, I called anyway under the influence that I wasn't a broker, and now thanks to the Don and Financexaminer comments, I see that I'am actually a type of broker. In that area that was just me making an unprofessional mistake in business and I do regret that immensely. I can see how that would make my statement contradictory.

The second point is another situation saying that most note-holders don't care about the middleman when they have a great lack of real-estate experience.
Most real estate professionals know of the option of selling notes and how they work. Now, For example, courthouse research, this is something anyone could do and follow to prove this.
In courthouse researching in private mortgages, after gathering information of about 50 note-holders in a county, and finally getting connected with the note-holder. You'll see that 9 times out of 10 that the note-holder will be totally unaware of this option and you'll will have to explain this industry to them a little to proceed in business. As you see most note-holders are unaware about this option to sell a note, thus proving that most note-holders aren't real estate professionals

Hopefully this explained that there weren't any unrealized contradictions, that was just me with lack of necessary experience. This is where the my needs of a mentor comes in. To no longer, make these mistakes.