All Forum Posts by: Joe Davis

I think have solid buyers is always a good thing. Although if your shooting them every lead you get to see what they would pay, you will eventually burn them out. 

My advice - partner with a realtor or lender who can show you how to improve your knowledge on values, now when your VERY close to striking a deal, bring the borrower in and do it that way.

99% of deals/leads etc. are trash....so if you sent them all to your buyer to get them to do your work for you (putting the value and rehab on it) as a wholesaler, it's not sustainable.

Take time to learn how to get accurate ARV's. Find someone that can help you! Even ask the buyer to sit down with you and see how they are coming up with the numbers.

The issue is timing - a wholesaler is going to move that property as quickly as possible. If you aren't contracting it from him (they will not give you an option). They will sell to someone else.

If you are prepared to leave EM at the table if the inspection report goes bad than so be it. 

However - what i would suggest is to have a good GC on your team that can walk it with you, and just add in a contingency for the inevitable. You are never going to get to the penny on a rehab estimate but a good GC can account for the majors and the potential risks that might show up. By having a cushion on your rehab, it will allow for some initial oversight. 

Juan, you could potentially find a lender willing to take some equity in the deal but my suggestion would be if the deal is solid, take it to another developer. Someone with a little more liquidity! They will give you more help than the lender can give you, just speaking from experience and than it will be easier to secure the loan anyways.

If the deal is good, i am sure you can find someone who also develops to go in with you on it.

 If you are a realtor that is wholesaling, just check your local Real Estate Commission rules. But essentially, you just need to ensure that you are not claiming to represent the seller and disclose on your contract that you hold an active license. 

Lending - depends on if you are lending your funds or you are brokering the deal out. Most correspondence lenders will not want you to in addition get a fee. Most of them have guidelines also about how much a wholesaler can make from the deal.

Having been a party to over 300 wholesale transactions, I can tell you with certainty that it is not illegal. Secondly, I am a realtor and also, I am a lender who sees wholesalers on the Hud all day. The above comment is correct, there are some states that have added an extra step (not assigning, extra disclosures etc) but in Texas you are fine. TREC has recently started to ask realtors their opinion on wholesaling but so far nothing has changed. You can use an assignment, or you can double-close using transactional funding. 

If you need help understanding how to double close as a new wholesaler, feel free to message me. We help wholesalers in DFW, Houston and SA all the time. Or - if you just need a little advice, here to help.

Wholesaling is a fantastic way to cut your teeth in REI and see what others are doing with their investments, don't let anyone discourage you, just learn how to do it where you are correctly structured.

I am a realtor, and happy to put a second set of eye on it. Also as a lender we see a ton of appraisals come in, and honestly i think having an appraisal to see what's going to increase the value seems a bit excessive. If you still need an additional opinion, shoot me the address and pictures and I will help (if still needed).

Some good responses on here! My advice would first be to really understand the numbers. $40k can go a long way or it can be gobbled up on the first deal. 

Learn how to evaluate a deal which leaves as little cash into it as possible. Understand the exit (lending) and you can determine how much cash you're going to need to park into a single deal. 

Your portfolio stops growing as soon as the cash runs out.... If you understand the numbers correctly you can get to low or almost nothing left in. 

Really good responses on here! My advice is to build the team before you do anything and have them to fall back on for advice.

From your question, the first person you are looking for is a private lender who can get you pre-approved but also can be an additional set of eyes on a deal for you. 

Never trust a realtor's comps (and I am a realtor too). Trust your gut with the value and don't try and force a number for the sake of it. 

Secondly, I am not sure of what your exit is but $92k is pretty low for value. Always consider that a lot of lenders have a minimum loan amount. 

Lastly with deals this small in value the needle swings pretty quickly. $5k in additional rehab and $5k less in what the appraisal comes back at can really be a deal killer when it comes to leaving to much cash into the deal. 

I like the lower end deals from a cash flow standpoint, as long as they are not in a warzone. However, i would always be very conservative...on the rehab too! The $15k to me would mean its a super clean house with no majors.

Zac,

As a realtor in Houston, and someone who used to market to 3000 realtors a day for off market properties let me tell you it's not easy. You will have to do something to set yourself apart as an actual buyer with credibility. 

if you want some real in-depth advice, feel free to reach out to me. I am also in Houston (Pearland). 

The first recommendation i would say is find a good realtor (friend/family) who will give you access to their MLS. Learn how to search for Sold listings which were investment properties. Now, look at the listing agent on that property and call them directly. Mention the property that sold - and tell them you are looking for something similar. Have a POF/PAL letter ready as you need to stick out from the crowd (and there is a big one in Houston) calling these realtors every day.

Be completely honest with the realtor, tell them how you are purchasing the property and don't forget to follow up with the goods ones, that give you their time. There are a TON of people who should not be realtors. Don't waste your time on those. 

In short - call realtors who have worked with investment properties recently - in an area you are familiar with or want to buy, look for the realtors who give you plenty of advice and are willing to chat and follow up. A deal will soon follow....