All Forum Posts by: John Ching

Christine, you've actually started in the opposite direction (in my opinion) when it comes to wholesaling and flipping/holding! Most investors need to start by wholesaling because it helps create a, "war chest" to fund flips.

But your experience as a flipper should help you excel as a wholesaler. 2 of the biggest hurdles facing wholesalers who have never flipped a home are: 1) estimating ARV's accurately and, 2) estimating repair costs effectively.

As a flipper (and wholesaler), my experience is that most wholesalers always inflate ARVs and underestimate repair costs. Also, keep in mind that as a wholesaler, you need to leave the lion's share of the profit for the flipper. 

Both Stephen A and Jose bring up excellent points with regards to either "double closing" vs assigning the contract on a wholesale. 

Christine, don't fret too much about the, "structuring of the deal". Most wholesale deals are pretty straightforward. Find a good title company that is familiar with wholesale deals and they will help you along. A good place to start is your local real estate investing club or REIA, they will always have good recommendations for title companies or members who work for title or closing companies.

Remember, a good deal will always sell itself.

Hello Pat! I'm down in Springfield, do you only invest in the St. Louis area? What sort of projects do you prefer? There is a very active investor community here in Springfield, glad to have you on board.

Christos offers real world insight, pay attention to his words!

Myself, being a college grad from long ago, echo his sentiments. However, since you are in college, get your degree. As for a relative field to RE investing? I'm partial to RE finance, since it would help you land a job as a mortgage banker/loan officer if you wanted to have a steady 9-5. it will also help you understand the ins and outs of credit and asset management and what to look for when helping clients qualify for bank loans.

As a broke-ish college student, follow Brandon I's advice and try your hand at wholesaling. It's a great way to become involved with RE investing without a war chest of money. Search BP for the best advice on getting started in wholesaling (marketing, estimating rehab costs, properties to look for, how to estimate ARV, etc.)

Best of luck, stay the path and you will succeed.

Sounds like you need to do a little more 'searching' here on BP forums (and even Google) for the best methods on locating deals.

For one thing, having, "limited funds" is exactly why people start wholesaling properties. It's a great way to raise capital and less headaches than rehabbing.

First, join or attend as many local real estate investing groups/clubs as you can. This is also a great way to build your buyers list.

Two, be prepared to work. One of the biggest misconceptions is that wholesaling is easy. If it was easy, everybody would be doing it. Yes, the occasional deal does fall in your lap, but the fact is, wholesalers put in much time and effort to find deals.

A great starting point to finding deals has already been mentioned, driving for dollars. Also, try bandit signs. You can make your own with supplies bought from Home D/Lowes or online sources like eBay.

When looking for deals, keep in mind who your end user will be and what their needs are. From my own experience (I wholesale but mainly flip) I'll tell you that most wholesalers fail in 2 main (and critical) areas:

1. They over-estimate ARV
2. They underestimate rehab costs

Do some research on estimating rehab costs using the tools here on BP. For ARV, always use sales comps. Having a friend who's a RE agent or has access to the MLS is always a good thing, but lacking that resource, you'll need to get creative when finding actual market values.

Good luck and let us know how things go.

Great point, Russell! 

Just when you think you've made something idiot-proof, nature makes better idiots....

Hey Michael, I'll throw in my .02$ and say that using a wholesaler to find your personal residence is a great idea. Why not? Wholesalers are just moving paper so why would they care if you are the end-user?

But to reiterate what has already been said, keep your numbers on target.

I've wholesaled deals myself and continue to do so. But one thing I find many wholesalers lack is the knowledge to accurately peg rehab costs and/or comps. Reading books on estimating rehab costs is great, but nothing beats first-hand knowledge. 

Do your due diligence and I don't see a reason why a wholesaler wouldn't want to work with you as the buyer.

Hey Lynne, good to see you on BP!!

Anyhow, to answer your question, I believe Steve is correct. Current leases must be honored. Leases that have expired become tenants-at-will, which means unless specified otherwise, their tenancy is month-to-month. Your client can have them sign new leases or give them 30-days notice to vacate.

If your client is not changing policies, terms or guidelines, I don't see a need to, "update" their current leases. Is there a reason he/she wants to update the leases?

Keep in mind, I am not a RE attorney (haha, gotta throw in the disclaimer!), so take that for what it is. But I did just pass both 40 and 24-hour State RE exam prep courses! (That and $3 will get you a coffee-of-the-day at Starbucks)

I'm sure someone in your office has specific multi-family knowledge of leases and terms. Let us know how it goes.

Best regards!

Hey Nathan, I guess I found your post about the, "MO mansion"! 

Anyhow, I think your best bet is Hard Money or JV with someone (Lucy B, *hint* *hint*!) with both funds and experience at that level.

Arianne L is right on track - Generally speaking, a $750K home is way above median pricing for Missouri. You want to do as much due diligence on comps w/real estate agents that know the area, especially when it comes to Days On Market. Depending on the area it's located, it could take years to sell that home.

You could try a local lender who would "portfolio" the loan (keep the note in house) and therefore have their own set of guidelines to get you qualified and set-up a construction/equity loan as well.

Try that step first, as their rates would be much more favorable than a HML.

Good luck and let us know how things progress!

Todd, what is the ARV?