All Forum Posts by: Rich O'Neill

Hi @John K. 

Obviously these are wholesale deals. It is surprising though because I just looked at the sales contract on the last HUD property I bid on and it says assignment requires seller written approval, which I doubt they would give. They could be doing a double close. As far as the bids going that high it must be part of the market going up and people who are willing to overpay for property. Sounds to me like a good time to sell in your market!

Not much substance but I hope this is helpful! 

Hi Rigo! 

All of the scenarios you presented are possible. In a lot of markets people are saying that the deal flow is drying up, but I think that is just an excuse for people being lazy. There will always be motivated sellers willing to sell at a price low enough to create a deal, we just need to be able to find them. I would start asking the wholesaler what they have the property under contract for. If they can confidently give you a number that is $5k-$10k under what they are asking from you then I think that is good. If they waffle or don't want to tell you then I would be suspicious and not work with them. This is a business and we all understand that everyone needs to make money and they should be up front with you about how much they will make off the deal. 

Last but certainly not least, run your own comps! If a deal looks good and you are seriously considering it, have an agent do a CMA (Comparative Market Analysis) for you. Some will do it for free to try and earn your business, others might charge you $50. It is worth the $50 to get some solid comps on the property that are not based on the wholesalers optimism.

Hope this helps!

Hi Fawaz, 

I have heard both sides of this. Some love section 8 because the income is guaranteed and often the rent rates that HUD sets are at or above market value. Section 8 quality homes are often less expensive than traditional homes as well. Some hate section 8 because it is often a more difficult tenant that often costs more to clean up after a tenant change. Many also complain that they get more maintenance calls from section 8 tenants than traditional. If you have a good property manager this should not matter.

Hope this helps! 

Hi Trey! Congrats on the first deal! Are you planning to assign the contract, or double close? If assigning, your next step would be to complete the appropriate assignment contract. If double closing I believe your next step would be to go to a title company (or do they close with closing attorneys in your state?) Either way you will need a title company or closing attorney that is familiar with wholesaling. I would start by finding them and ask them this question and they should be able to walk you through the process. 

Hope this helped! 

Hi Annabelle! Congrats on the house! Just spitballing, i have read that international banks like Citi can help in scenarios like this. A Canadian bank may do the deal since they have the ability to run your credit and background easier than an American bank. An American bank may do it because we have so many trade agreements and things with Canada. I would start at Citi or another international bank (TD is a Canadian based bank that does business in US). 

Hope this helps! 

Hi Denise! 

In my opinion, using a low appraisal is a good thing. Appraisers are held to a very high standard and at the end of the day, the only ones a bank will listen to when it comes to the value of the home. You would be treading dangerous water if you started running your analysis based on say appraised value plus $X or X% or some other valuation tool. If sellers don't like your analysis then that is their problem. You can also "blame it on the appraisers and banks" and basically say that "this has to be my number if you want to sell your house today because my bank won't let me do any more." 

You might have to do more work to find deals but it is better to do that and find actual deals than fudge your numbers and end up with a property you lose money on. 

Hope this helps! 

Hey Trey, welcome to the site! Most banks I have dealt with will refinance after 6 months based on the new appraised value. Any earlier than that and they use the sale price. To my understanding most banks won't let you finance through an LLC, but a portfolio lender may let you do it and just put you on the note as personally guaranteeing it. If you are looking for a loan based strictly on the property's cashflow you are probably looking for a commercial loan which I do not know much about. My limited understanding is that they have higher interest rates and shorter terms meaning your payment will be higher.

If you can find a lender that will give you a standard residential mortgage then it may be worth going that route because the terms are very favorable. Hope this helps! 

Hey Marriel! Welcome! I would recommend digging into the forums and listening to the podcast. I listen to the podcast every day on my way to work and learn something new with every episode. Can't think of any books specifically on wholesaling but any marketing or sales books would be good because that is the bulk of the job, marketing (to both potential sellers and potential investors) and selling (to both the seller of the home and your buyers). Good luck! 

@Linda Chmar no problem! Hope it was useful for people. Just seems to me that there are more pros than cons to it unless you are trying to do shady stuff in which case you shouldn't be in business in general!

@John Lindemann Let me know how you do!