All Forum Posts by: Neil Goradia

Hi @Daniel Knichel, I can help with your questions.

1. Yes, you can and should request to see all leases, tax bills, owner paid utilities, and any other pertinent documents related to the property before buying it. The main things on there to verify are rent amount, when the lease begins/ends, and any special terms on there.

2. Usually landlords don't want potential buyers to contact the tenant because if they don't end up buying the house, it makes the tenant worry that they may get kicked out when the house does sells. If you can find a landlord that has already had a conversation with their tenant about selling the house and will let you talk to the tenant that is definitely a bonus. In order to know for sure they are paying and current, you need to ask the landlord for their rent roll (proof of payments) for the past year. You can also check to see online (public record here in Indianapolis) whether they are currently being evicted.

3. The due diligence period for me is basically the period before you put any money into the deal (including any earnest money). Also, if you've put in an offer contingent on inspection, financing, or anything you've written in there, and it was accepted, then now would be the due diligence time period. If anything comes up that you have a contingency for and you feel the deal is not worth it, you can walk away and get your earnest money back. It's not an official period of time per say, just any period of time before your cash is at risk.

4. A real estate agent will definitely be willing to help you with comps and other advice, especially if you use them for the purchase of the property (since they will get a commission). The commission is paid by the seller (not you), so you should definitely take advantage of their help and expertise in that area.

If you gave the money directly to the other party, you can sue them in court if you can determine where they live. Usually it's less than $100 to sue them and you'll have a decent shot at getting it back if they appear in court. If they don't appear you can have a debt collection company put a judgement on their credit. They will eventually contact you if they want it off their credit.

Also when you meet other wholesalers, don't view them as your competition. If you can find them a buyer or vise versa many will split their fee with you. It's a great way to expand your network, do more deals, and learn from the experts in your area.

@Phil Morgan I think each situation is different, and each investor is different. Sometimes if you just listen to them, they will propose something - usually better than you would have proposed yourself. Ask him for his thoughts about what he'd want to go into the deal with you...afterall, you are bringing the deals to him and your real estate experience to the table (which I assume he doesn't have). He may want in at 50/50 on all 3 types of deals, or come up with something creative. If he just dances around the question and wants you to propose something, then I'd propose 50/50 on the deals where he would get his money back within a few years (with no interest during the pre-refi period since the deal could not happen without both of you, and there is a big upside for him after he gets his money back). On the deals where his investment is in the property long term (2+ years) I'd imagine you'd have to give him a little more equity than you, but not much more if you can bring value such as management services, etc. Again I think if you just listen to him first before proposing something you can learn what he is expecting and maybe his expectations are the same or lower than what you are willing to give. 

@Devonta Taylor yes sir! Sounds great man, talk to you soon.

Although I haven't been in a partnership on a long term apartment deal, I have been in many partnerships in long term single family deals, and it can work out. But it can also cause a lot of tension, end relationships, and you could end up losing your money. The way it works on paper is to be very specific in your Articles of Organization when you form your LLC regarding exactly what each person brings to the table and what their responsibilities are. Outsource most of the work so that neither partner starts comparing how many hours they are putting in compared to the other. Getting a property manager (if you can afford it) would make things cleaner. Put in a clause that discusses in detail how each person could get out of the deal if they choose so that the person with less risk doesn't just walk away. It's difficult to talk about when you're starting a business because everyone will be very optimistic (it's like talking about a pre-nup when you get married) but its a mistake if you don't. No real estate partnership will last forever. Good luck.

Got it. Yeah, I've mainly done deals with Andy and Ryan over the past year or so, and am trying to get it going on my own. As you know it's a tough business to break into but there is a lot of potential. My past experience is in being a landlord, rehabs, flips, land development, etc but wholesaling is relatively new to me. Maybe we can talk more in depth at the next CIREIA or INREIA meetings if you go to those. Otherwise, just send me a text whenever and we can grab lunch or a beer. I am trying to wholesale in Mapleton Fall creek but competition is pretty fierce there, so I've started to drive 4$ around my rental properties to see if I can get traction. I've seen some success with direct mail as well.

@Devonta Taylor yes we did! Sorry, I didn't realize that was you. Who do you currently work with, and which areas are you wholesaling in? Let me know if you think we can work together on something!

I replace outlets and switches myself...makes the place look very new and clean and is very simple to do. 

I think because D4$ is so hit and miss, it may be hard to find someone willing to spend their gas money without a guaranteed finders fee. However, if you don't dictate how they find the deals or make it mandatory to see where they have driven, then there are many bird dogs out there willing to provide deals for some type of finders fee.