All Forum Posts by: Nereo Mendoza

I also live in the DC area and had been in the same dilemma for a while, there are lots of cheap properties in Baltimore, but if there is not at least a few sold with good prices after repair you can end tied up with a rehab property for months.

So the trick seems to find an area with some rehabed properties sold for a good price recently, which sounds simple but is not

The other thing I have heard the laws in MD are more protective to the tenants than in Virginia, so you need to be careful renting.

anybody knows of a good area like we are talking?

What about waiting to the beginning of August to have a feeling of the time necessary to finish the rehab and if you think it will be ready on time then put the coming soon signs in the yard and in Craiglist

The tricky thing here is the last days is when you can see a real difference in the house, when the last touches are been done

You are more likely to get top dollars when people see fine finishings and everything is clean and polished, but maybe receiving a little less money is better that sit and wait paying holding costs

good luck

Joe don't forget to take into account:

- the 5 or 6% you will need to pay to the listing agent when you sell it for 105k, it will mean 6,300$

- you will need to pay closing costs probably close to 2 or 3k$

- The holding costs (taxes, insurance, utilities, etc)

- Financing costs (origination fees and interests)

Sometimes the wholesalers get the property from an agent and put in under contract, so you will see it on the MLS with under contract status

In my area most of the cases the numbers don't work with properties from wholesalers coming from the MLS, because they have more competition to put them under contract, but as always there are exceptions

Typically the agent will request a representation agreement from you when he start setting the MLS searches or before submitting the first offer, but the Investor probably has an agreement with his own Realtor to get money back or discounts in the next transactions, it can be tricky to have everybody happy in this case and it can even jeopardize the business with the Investor, but is good to clarify this ahead to avoid problems with your Realtor and keep getting leads from him.

Note: for us the MLS has not been really useful to find leads here in the DC area, the heavy discounted properties are taken long before they hit the market, and the few good ones that appear in the MLS doesn't last much or get multiple offers from inexperienced investor that pay to much (and probably don't get any profits at the end)

I will make an example to see if this fits your scenario

- The realtor sets an automatic daily search in the MLS with your parameters and you get a daily email with a link to properties

- When you find a property that looks good to wholesale you call the agent and provide him the deposit check, proof of funds and the conditions of your offer, he makes the offer in your name (for example on 100,000$)

- The listing agent presents the offer to the owner

- If the owner accepts your offer, you calculate the price for reselling the contract (let's say 110,000$) and you start looking for investor to assign your contract

- You find an investor and agree a price (let's say 105,000$) and to close in the established day according to the contract you have

- If the investor is willing to use your agent, then he will represent the buying side and the listing agent will split the commission with your agent (typically 3% for the listing brokerage and 3% for your agent's brokerage), which is transparent to you because the seller is the one who pays that to the listing agent.

- Then you will pay part of your assignment fee to the realtor, according with your agreement (30% of 5,000$ = 1,500$ if you found the investor or 70% of 5,000 = 3,500$ if the realtor find the investor)

There can be an issue

- Probably the investor has his own Realtor to handle his purchases, in that case you will need to figure out something mutually agreed with your Realtor, because he and his Brokerage will not get his split of the commission from the listing agent at contract closing

Anyone has a comment about this?

Hello all

I'm trying to connect with wholesalers and bird dogs in the DC, Virginia and Maryland area

Does anybody knows there any web site to connect with them?

thanks a lot

Welcome to BP Brent

Here you will find countless useful information, just need to have patience and read constantly

I'm in Vienna VA and looking to buy properties for rehab all around the DC area

where are you planning to get your properties?

best regards

Nereo

Dear Tamarra

Welcome back and best luck with your business

I'm in the DC area and had been looking Baltimore with lots of interest, the prices are way better than here and it's relatively close

I had been also studying a little about section 8 renting and HUD homes acquisition, seems to me it can be a good source to develop an investment portfolio

My only concern is managing the properties, given the problems this kind of tenants seems to carry (difficult to collect rent, constant repairs, damage in the property, etc)

by the prices and rents seems there is not much cashflow left and the properties probably need lot of continuous maintenance to recover them from decay

Also a realtor told me the city protects the tenants a lot more than other cities

what do you think?

best regards

Nereo

Welcome Lynette

I'm also in the DMV area interested in doing my first buy

I which area of MD are you finding your wholesale properties?

best regards

Nereo