All Forum Posts by: Kendell Johnson

Peter:

I am a wholesaler that is always looking for investors to send my deals to. I read Matt M's comment that you can't trust the number for wholesalers feeding you deals and I think he has a point; however, I would highly recommend you avoid this by doing your own very quick due diligence on anyone that sends you a deal. 

First, you have to expect an Investor Packet (IP) that includes all the information on the property, neighborhood, repairs and potential cost of repairs. The IP should also include a divide on if you are planning on a Hard Money Loan (HML), Private Money (PM), or if you plan to pay cash and how the profit differs in each situation. And COMPS (!!) they mean everything. As investors, we live and die by comps. And GOOD comps.

Just do your homework and make sure that the deals you are sent make sense. There *are* good wholesalers out there that do the work for you legitimately. It's a great resource for investors. I hate to be discounted because of previous bad wholesalers. 

I do amazing due diligence and have great deals all the time. I would be happy to send any your way for your own due diligence.

Good luck with all your endeavors! This is an exciting business...and very fun!

Kendell

$$$$ WHOLESALE FEE REDUCTION $$$

!!! Offer accepted and EMD has been submitted !!!

Purchase Price = $560,000 (Includes wholesale fee)

Rehab = $100,000

All Fees & Taxes = $58,300 (includes REA commission)

ARV = $780,000 (VERY conservative-average selling price in neighborhood is +$850,000)

PROFIT = $61,700

Property includes a main 2 story 3 bed/2 bath residence PLUS a 2 bed/1 bath basement apartment

Structural Engineering Report found NO significant defects

Numbers above do not include points & interest for a loan

**Passive income opportunity for the Mother-in-Law basement apartment of $1,100***

@Joshua Meyers Not at all! Glad to have the information.  It lets me know that I might have to work a little less if I focus on off-market properties :-) Valuable info! Thx!

@Gulliver R. Thanks for the clarification! This is a whole different animal from what is typical with wholesales. Usually, in my experience, you deal with two agents, possibly a hard money loan...maybe private...and you have to account for all the holding, junk and agent fees. It's fantastic that you have gone this direction! :)

Okay @Joshua Meyers I am not suggesting we are buyer's agents. But, I'm trying to assist in the understanding of what a wholesale deal is. I am simply saying that, as a wholesaler, you want to use the buyers guidelines until you transfer the deal. You mention "most likely listed" so that tells me that you are dealing exclusively with non-listed, off MLS properties?? This wasn't what was established in the original post, my apologies if this is focused on off-market properties. I was just trying to help a fellow wholesaler and help him prevent himself from getting into a bad deal that he can't escape from.

And to your post, @Gulliver R. about having a lawyer to look over your contracts...Yes! You could get into a situation if you don't make sure your Due Diligence wording and contingencies aren't accounted for in order for you to back out of a deal should you not find an investor to buy it from you. Now, based on the fact that you don't have an agent, you can cut your agent commissions by half so the deal is going to look much better profit-wise. As far as the escrow, the seller holds the escrow.

Consider yourself a buyer. You are selling a "buyers contract." Simple. All the rules of being on the buyers end of real estate apply to you in wholesaling. You are seamlessly transferring the deal to an investor that will flip it.

@Joshua Meyers If the deal is going through two agents - buyers agent (us as wholesalers) and sellers agent - then commissions are due to both parties. These commissions will not be a concern for either the wholesaler or the investor buying the wholesale deal as these are tasked to the seller.

I agree with Roland about the Real Estate agent. They should do most of the heavy lifting of the transaction including the contract writing and dealing with the seller's agent and they will also let you know the title company to pay the earnest money when it's due.