All Forum Posts by: Jordan Petty

@Brad S - still learning about how taxes and real estate. Eventually, yes that would be the goal to raise rents.

@Bill Werkheiser I agree it with you on that it shouldn't be the exception. Because, if you keep going like that for too long with multiple properties, then you will really be in over your head. The risk will definitely increase.

That is a good point @Jordan Moorhead. I think the way I was looking at it is that you would still be building equity.

Haha I figured @Joe Villeneuve  was being sarcastic. Found it a little humorous. 

I would agree that I do not know the "true" expenses of a property. When I run the calculations, I am only using the higher-end of the "recommended" number/percentages. However, this still may not be close enough in real world.

A strong financial position makes sense. What if the economy tanks and I lose my job? Will I sustain long enough to off-set the negative cashflow AND the unexpected expenses?

I think it's tough sometimes for the "newer" people who want to invest because of all of the success stories we read or hear about. On top of that, people are saying to hurry up and just jump in, making mistakes. I agree about making mistakes, but what if those mistakes put you at a greater disadvantage in time and money vs. just waiting and building the cash for a down payment plus some to get a start on emergency expenses?

It's all about decisions. That is life pretty much.

Good Afternoon Everyone,

My name is Jordan and I am from Houston, TX.  Currently in process of getting my real estate license and have a long-term goal of buying rental properties to eventually cover my monthly expenses and to give back to the people in my life who got to where I am at today.

I tend to get discouraged when I analyze properties (in Houston) where the cash flow is slim to none. Maybe I am being too conservative on expenses and rate increases? I have been mainly looking on Zillow and have been using the BP calculator for my analysis. Because of this, I have even tried analyzing properties out-of-state such as in Tulsa, OK looking at properties that seem lower risk ($40K + price range) and better cash flow. It also seems so far away because I am just now starting to save for a property, as most of it has gone to build of my 6 month emergency fund (Sometimes I think about using my emergency fund to buy my first property). With investing right now seeming like a stretch, I kept thinking and thinking only to have the light bulb go off.

What if I could get away with buying a property that may have $-100 cash flow and just eat the $100 loss? I have a full-time salary job and because I am super on top of my personal budget each month, I know that I will have about $1,000 leftover each month after all my personal expenses. So If I bought a rental property that cash flowed -$100 or - $200, I would basically just be paying $100 - 200 a month from my $1,000 that I have left over from my work income. The rest would go towards saving for more properties.

With all that being said, is there anyone on here who has done this, fell into it by mistake, or would consider doing this? Or is this just a bad idea altogether? 

I am open to all opinions. Feel free to even tell me its dumb idea. I am just looking for some guidance on how to get started.

Thank you,

Jordan Petty

Thanks for the comment Guy. Well that is where the Termination "Option Period" would come in I believe. My attorney advised that I could put up a non-refundable option fee for maybe $100 - $500 dollars for a period of time that goes by and then increase for each # of days that goes by in the contract, so for instance:

(Option Fee - not Earnest Money)

$500 give to seller 3 days after contract is signed.

If close hasn't happened within 15 days, give them another $500.

If close hasn't happened within another 15 days, give them another $500. 

That way if your termination option was open for 30 or however many days, and you terminated, the seller would still get non-refundable money, I would get my earnest money back (likely $1000), and then go our own separate ways.

I have enough funds to put up an earnest money deposit, plus non-refundable termination option fee. I feel its more ethical to have some sort of skin in the game.

Hello Everyone,

So today I spoke with an attorney today regarding the process of wholesaling and how to properly set up my purchase contract and assignment contract. I hear so many different things from people online it just keeps me confused and prevents me from taking the "next step". I have already began my mailing and talked to a few sellers, and before anything moved forward I wanted to clear things up with an attorney. Also, I see people market deals all the time and due to the recent changes in Texas law, I wanted to clear that area up as well. I am definitely the type of person who likes to have his ducks in a row before executing - which can be an issue sometimes.

One thing that I learned surprised me. If I use the TREC contract, and then have the "assignee" sign the assignment contract (that has the assignment fee on it), then the buyer should hand me the check at that moment. Then, that removes me from the rest of the process. No going to closing, etc. like I have read/heard from everyone else. If the buyer tries to default, then I still get the assignment fee because he already signed the contract, and is still obligated to the original purchase contract as well. He said I am there to "sell the contract" not "sell the property".

Has any wholesalers gone about the process this way?

Also regarding marketing. He advised that if you are posting on craigslist, etc.: avoid posting price, avoid posting pictures, ARV's, and repairs. What can be done for posting is headers like "House on 123 Street for $500K Assignment", or "Selling Contract for $500K" and have interested buyers contact you. Once they contact you, THEN you can give them more information. Because if you do not here in Texas, you would fall under brokering without a license. He advised that the best thing I could do is have investor buyers that I can trust and that will go through with the transaction.

I would like to here your thoughts on this. 

Thanks!

Thanks Andrew. I have attended a few meetups here in Houston, especially a new BiggerPockets one and have met a bunch of investors, but very few rehabbers. I should look for a meetup that is more for rehabbers.

Hello Everyone,

I have started my first wholesaling mail campaign in the Spring Branch and Sugar Land (77498) area, and have spoke to a few sellers. I wanted to see if there were any Rehab/Fix & Flippers that do business in these areas, so that I can get a better understanding of what they are looking for in a deal. That way I am able to zero in on deals when they come up.

Any help would be much appreciated - especially also on repair estimates, rebuilds, etc. I am still learning a ton and taking as much action as I can!

Hey Everyone, wanted to respond to this since I am trying to start wholesaling, but this is the main obstacle that has been standing in my way. Since I value honesty, I think I can do wholesaling by fully disclosing what I am doing to seller AND buyer as the law states. 

Is there anyone here that can help me with how to go about this? I am about to send out my first direct mail campaign soon.