All Forum Posts by: Kenneth Sok

Thanks everyone again for your input. It never ceases to amaze me the generosity of BP. 

I feel like this is one of those gut check situations. My introduction as well as conversation with the applicants had been pleasant thus far and didn't raise any red flags. The eviction definitely did. When I spoke to her, I told her the recorded date of the eviction was 2013 but she remembered the case going back to 2010. Yes, the story needs to be verified which I plan to do. But I don't get the sense she is lying... yet. Once I uncover more details, I'll be able to make a more definitive decision.

Thanks everyone for the responses!

I followed up with the couple about the eviction. The wife was surprised but when i mentioned the details, she remembered the incident. 

Turns out they had a bad landlord that they were trying to work with but he filled an eviction against them. They settled out of court but the background check still picked up on it. 

Always good to follow up and be forthcoming about these details and the tenant was very open as well. 

I appreciate all the feedback.

I have an applicant family for one of my rentals. I've been following the 4 criteria. 

- 3x rent < income

- Good references

- clean background

- No evictions

So far, the wife passes all criteria.  The husband though has one eviction in 2013. He passes all the other criteria though. I feel like this is a gray decision. According to his background check, it looks like he had some financial difficulty in 2013 and 2014.

What are your thoughts on if I should rent to them? And if so,  would you put any other contingencies or requirements? 

Fyi: rent = $1450

Neighborhood is a B- in Houston

Thanks in advance!

Interesting thread so far. Here are my $.02 so take it with a grain of salt and consult any legal professional for additional information.

I've done about 30+ wholesale deals in 2 years. We haven't had any issues until recently. I don't have a license and have gone by the process that you get a property under contract and assign your rights. We don't do double-closes (aka simultaneous closes). The contract(s) we use are fairly simple without much hassle (i.e., one page contracts) which allows us to assign our rights.

Given that, it all depends on the title company you use. We used a few that are familiar with our contracts and haven't run into any issues. We do have a few that were done through more big name title companies that have run into issues. As such, I have heard of some wholesalers being "investigated/sued". I'll be honest that I'm not too clear on the details yet but I believe it is from deals that went astray (not successfully and may have been ugly).

To sum it up on whether you need a license or not, it's up to you on your goals. If you want to wholesale, I say be wary of getting the license but also do your due diligence and know how all the pieces fit together. Wholesaling, although the cheapest point of entry for many new RE investors, is also, in my opinion, the hardest as you need to do many things well and consistently and persistently. I have wholesaled without a license and continue to see others do so as well. I believe it's more along the lines of if you are successfully completing transactions without issues, HAR/TAR won't bother you much. It's when things go awry that they get involved.

Thanks @Russell Brazil .  That's what I assumed too but wanted to make sure with people who had some knowledge of it as I have never had to deal with the due-on-sale clause.

He's an older gentleman and his credit is very important to him.

I appreciate your response.

Hi all,

I have a potential sub-to deal I'm working on. The seller is aware of how a sub-to works and has concerns about the due-on-sale clause being invoked.

If this were the case, I have a private lender that I work with that can fund the deal.

The seller's biggest concern though is if having a due-on-sale clause invoked will affect his credit. He is very particular about preserving his good credit.

What happens when a due-on-sale clause happens? How long do we have to pay off the loan if the bank calls it? Does it affect his credit, even if we are able to pay off the loan before the bank deadline?

Thanks in advance!

Dang, @Mike Reining! Sorry to hear about your horrible experience!

Don't know what part of Texas you're in but I've used Trinity Foundation and didn't have any problems with them. If you're in the Houston area, definitely give them a call if you need more foundation work done. 

@Jonathan Garcia - Best of luck to you! I'm a wholesaler in town as well and would be happy to assist.

Let me know if you have any questions.

I completely agree with J Scott.

One important point that I think many new wholesalers don't anticipate (myself included when I first started) is the level of title issues and "problem solving" that you will have to do.

Gurus will spout on about how easy it is to just market, negotiate, and then sell a property but they never mention that you'll need to manage people, expectations, title issues, legal problems, tax problems, etc. 

You may not get all of these on every deal but don't be surprised that you end up with a few that you have to manage at the same time. I've had all of the above happen on just one deal and it was no cakewalk.

Finding a good mentor or someone who's been in the business and understands these problems can go a long way to help you run the deal from end-to-end.

Feel free to PM if you have any particular questions. I'll be happy to help. 

Best of luck.

Depends on your strategy and how fast you can rehab a property but I've heard that fall and winter are the buy times to position yourself to sell after the New Year. We've found that retail house buying slows a bit during the holiday season due to everyone shifting to the family time and travel. I'm sure each market is different but that's just been something we've noticed. 

That doesn't mean there aren't motivated buyers out there or motivated sellers, but we generally will be looking for our flips during this time so that we can have them finished after New Years. Either that, or we factor in the wait time, holding costs, etc. into our buy price and sell price if a deal does arise during this time that we want to jump on.

Best of luck!