All Forum Posts by: John K.

@Juliette B.

While it is possible to get a really good sense of how much repairs will be with asking the correct questions over the phone, there is only one way to get actual numbers, and that is to look at the property. If the seller says, "it needs a new roof", does that mean just shingles or does the decking need to be replaced, as well? Unless the seller has had it already looked at or has real knowledge of construction, they may not know. 

As a wholesaler, you should strive to offer the best service you can. It is what is going to keep investors coming back to you, on your next deal. If you get on the phone or exchange emails with a potential buyer and all you keep saying is, "I don't know" or " You will need to look at it yourself", it's not likely they will continue that conversation. There is an expectation that you have looked at the property and come up with a list of necessary repairs, and have pictures to support your claims. The more information you can provide for them, makes it a much easier for them to decide if they want to look at it, or not.

John

@Jason Foy

This should do the trick. 

https://my.mnbar.org/HigherLogic/System/DownloadDocumentFile.ashx?DocumentFileKey=c6132aa6-6543-1f4e-bc92-91877424a1e6&forceDialog=0

@Ronny Tiburcio

* Ask them to actually see a copy of the contract they have with the seller, then confirm the seller listed, is actually the owner. There should be no valid reason to object to this, as they should know the ways to protect themselves. Sometimes you can trip up the daisy chain, by just asking who the owner of record is. 

* Validate their numbers. The biggest complaint is the wholesalers are creating their own numbers. If their numbers come in close to what you see, this should begin to build trust for you. As far as the repairs, there should be at least written estimates of the major expenses. I would not put much stock in overall renovation numbers, as there are many factors involved on whom gets what pricing. 

* As previously suggested, confirm the property is not currently listed. 

* Ask them for proof of previously closed deals, this can be actual HUD statements if there were double closes or copies of Assignment agreements.

*As suggested, ask them if they have visited the property. If you have pictures of the property, quiz them on items that are hard to determine from a picture. Are those hardwood floors or laminate? Is that a cast iron tub or steel tub? Unless the pictures are of high quality, it can be difficult to tell the difference, from just a picture. It's not important that you know yourself, you're gauging how they answer. If they know the answer because they have been there, their response will be almost immediately. If they pause, it's because they are trying to remember a conversation or they are looking at the picture, themselves. 

*After all of that, just ask yourself one thing, Does it pass the smell test?

John

@Ramiro Rodriguez

I use the contract provided by TREC, 1-4 Family Residential contract. https://www.trec.texas.gov/  You may want to consult with an attorney to see if any alterations would be needed to that contract, based on your business model. Wholesaling real estate is all about full disclosure, to avoid any problems or confusions. 

As far as starting and completing the transaction, you have a few options.

1. Get the property under contract from the seller. Locate a buyer for said property and perform a double close with the buyer and seller, and you will be paid the difference. You can use transactional funding, if necessary. You may consider filing a memorandum of contract, to protect your interest in said property.

2. Allow the buyer to go under contract directly with the seller and you receive a signed assignment of contract, to have your fee paid at closing. This eliminates the double close and saves on closing fees. 

3. Buy the property outright, then sell it. 

John

@Candace Price

Congratulations on your strong ambition, I hope you get to realize that goal.

I would focus less on what the banks CAN'T do for you, but how you can achieve your goal without ever needing them. Don't ever allow another company, to dictate your business model. The banks, in general, can't get out of their own way. 

I would spend considerable time learning all you can about owner financing and how to negotiate those deals. This is a very valuable tool to have in this business and once you become very good at it, you can buy them all!  Trust me when I tell you, there are a lot of home owners that love the idea of making even more money on their home, it's all about how you frame it and sell it. 

In fact, I would learn all of the creative ways to get deals done and realize your dream, on your terms. 

John

@John J Garza

If that person went on this forum or any other and openly admitted to ripping off someone else, that speaks volumes about that person, not you. This is a moral decision they need to come to understand, so I would not take advice from such a person. 

It is true that there is a lot of negativity surrounding wholesaling, but that's only because just like every other "profession" in real estate, there are horrible people involved. Those that do this business the right way, enjoy a very lucrative business. Those that do it wrong, have limited to zero success and cause the entire concept to have a bad name, as if no other concept suffers from this. 

Research your state and learn exactly what you need, to successfully start and complete a wholesale transaction. I don't know about NC, but in Texas, we have a very effective way of protecting our interest in any property. I imagine there would be similar ways to do this, in all states, but you would need to discuss with an attorney. 

If I had to guess, most of the people that speak out against wholesaling, simply don't understand the process and just how much work goes into it. It is so much easier to visit any one of the websites that have houses for sale, and hope that there are enough deals there to mean anything. The investors that put in enough time, quickly learn to love working with wholesalers, because we deliver what the MLS just can't deliver.

If you work hard to deliver quality deals, you will never have to worry about finding investors with a strong moral compass, they will find you. 

@Jason Lam

That's it, exactly. If you just start a normal conversation with them, they will tell you exactly what you need to do and say, to buy their house. 

@Kay Ferdous

If the studs are still exposed, use oil based KILZ and it will block the smell. 

@Jason Lam

The questions you need to ask, will depend on the type of lead it is. This will also determine the way to approach those individuals. You can't really can these answers, because people respond differently to the same situation. 

If I was following up on a property with delinquent taxes, I usually start the conversation with something along these lines.

" Hello, Mr. Smith. My name is John. I am calling/writing in reference to your property located at 1234 main st. I am not sure if it is accurate or not, but ____________ county  is reporting that the home is "X" dollars behind in taxes."  If this was a phone call I would stop here and let them talk. If a letter, I would add the following:

" I would like to offer you up to $125,368.79 for your home, which will include paying off any and all taxes, closing costs associated with this transaction, and I will pay you up to $1500 in moving expenses, if necessary."

In the first paragraph I don't want to use "you are behind in taxes", as it could come off as confrontational, so I used the home was behind. I also don't want to come off as accusatory, so I leave the door open as this being a possible county error, thus removing the shame.

In the second paragraph, I made up some weird number, because it immediately begs the question, Where did you get that number? This means they will have to contact me to get that answer. Sounds odd, but it works. 

At the end of the day this is about 2 people having a conversation. Don't overthink it, be empathetic to their situation, and you will keep that door open. If you come off as reading  a script, most people can sniff this out and you won't get very far. Let them talk, you will learn exactly what needs to happen to buy this house, if you just listen. 

Since you are out of country, you will need to develop your network locally. You will need to find someone, preferably a contractor, to actually look at the house and give you an assessment of its condition, so you can make an offer. If you are comfortable looking at just pictures/videos and coming up with repairs, then you can utilize just about anyone with a quality camera. 

Good Luck!

John

I used Stratics Networks. I would drop around 1200 per day, for $200 month, with a 15 sec voicemail.