All Forum Posts by: William Byers

I use Equity Trust, and have a combination of Traditional, Roth, CESA, and HSA. The funds I use are dependent on the particular deal, and tax liability and benefit is a consideration of every purchase.  It's great to understand these tools and be able to apply them to your specific objectives.

@Ryan Billingsley it is one tool to have in the tool box, and I decided to get my license for several reasons. I work in Corporate Real Estate, so it benefits my day job as I prepare to get my Broker's license this year. I wasn't doing wholesaling at the time, I've done most of my deals off MLS, Homepath, and thru wholesalers. But as my partner and I considered creating a wholesale business to feed the increasing pipeline we need, I realize it's important that I don't misrepresent myself in a buying situation. If a seller ends up with remorse on a deal, all he has to do is file a complaint and I have to prove transparency to protect my license and from liability.

I use my license mainly to be able to list my flips and capture the commission, yielding more profit overall for me and my partners.    I am also pursuing my Certified Commercial Investment Manager (CCIM) designation.  The tools available makes it well worth the time and expense, and I also do commercial deals and land deals.

@Cameron Ellis you are spot on Cameron.  And in your example, you created value thru knowledge and due diligence.  Worth every penny to the end buyer.

I just agreed to a purchase a wholesale deal this morning, and it's a wholesaler I know and have developed a relationship with.  And he IS young, but he worked with another local WS while learning how to evaluate and negotiate.  

I also agree with the statement that good investors have good wholesalers, getting the best deals first, and best price.  And the wholesalers that send me garbage data do get constructive criticism from me as to where to find comps, as well as the areas that I focus on.  

I am also working with some newbies and I provide guidance on how to put a deal together. I give them a full package of information on how to do deals , research property data, and offer to mentor them thru their first deal. My info includes a simple spreadsheet calculator that calculates CAP rate and has taxes, insurance, maintenance, and management fees so they present at least a reasonable estimate.

And ARV is more critical to me for a flip than a B&H. For a B&H, I am buying cash flow not necessarily appreciation or equity. Know your market, know how to estimate repair cost, and shop your own deals. That's all a buyer really expects.

@Uyenchi Ho You said he doesn't seem like a distressed seller. That's a HUGE red flag. A WS can only add value to a deal if they can get the property under contract for discount. Is he offering them at a discount? Are the properties for sale part of a rental portfolio of the seller, or does he bulk purchase REO assets. If it's a portfolio, has he shared the rent rolls for prior 2 years. What's CAP rate? There's only two plays in this bulk sale, discount to ARV for a resale, or purchasing cash flow assets at some CAP rate.

There are a few ways to handle this

1.  Option contract - how much for an option to buy, and how long with that option be good for.

2.  Bring in a more experienced partner 

In my earlier post I said "Really good WS can do well, but they need to start by working with someone who knows what they are doing before shopping deals."

This is a perfect example of a deal you don't have the resources to pull off without huge risk.  Be wise and take a small piece of a huge deal, and learn from your partner.

As Brandon T. likes to say, part of a good deal is better than 100% of no deal.  Or worse, 100% of a bad deal. 

I wanted to offer a suggestion to anyone interested in getting started and is considering both wholesaling and is also pursuing their real estate license. 

Be sure you understand the implications of having a license and wholesaling. Make sure you comply with your state disclosure rules about being licensed.  One option to consider is to find an active Investor/Realtor and offer to be their assistant and let them mentor you while you pursue your license.

You CAN be both a realtor and wholesaler, but you can also get in trouble if you aren't careful and transparent.

I don't think WS are intended to be the punching bag here @Account Closed 

The issue we are talking about is legitimate WS first of all, and my particular take is, besides people shopping deals they don't own, most of the WS deals I get are generally not good deals. The repair values are not anywhere near accurate, and ARV simply wrong.

Really good WS can do well, but they need to start by working with someone who knows what they are doing before shopping deals.  

I give anyone credit who goes out and works hard to put together a deal.  I am happy to pay a WS for the value they create finding and getting a true deal under contract. But I pay them for "value created" not effort. 

@Jeremy Tillotson Same issue in Jax.  I get the same deal from multiple WS, all different prices.  My ratio is like @Jeff West 1 per 300 for a deal that actually has sound numbers. Whenever I get an email, the first question I ask is 'do you have equitable interest'.  If they don't, I let them know I only deal with the person under contract.  If they don't have equitable interest, it's not wholesaling it's dealing without a license.  We are initiating our own wholesale business to create more legitimate opportunities. 

Great article @Justin Pierce 

I think we need better leadership at all levels of government, with true statesmen versus politicians.