All Forum Posts by: Daniel Paloscio

@Erik Littlefield partner with another wholesaler or investor in your market. They may also be able to help you find an end buyer. If the numbers are right finding someone to put up the 5k will be very easy.

@Marjo Naci your title company or escrow attorney will handle all of the transfers of money. You will typically outline your assignment fee in the assignment agreement between you and your end buyer. Then, on closing day your end buyer will wire in all of the money to pay your seller and your assignment fee to your title company or escrow attorney. From there your closing agent will process your closing then wire the sellers money to the seller and your assignment fee to you.

I am not sure what state you are in, but you should not need a physical copy of the deed. That document is typically held by the county clerk. Just check your local county assessor/property appraiser site and pull up the property address or parcel ID. Typically that info is online. You should be able to see there who is on title at the property. 

If you run into any issues there, you could reach out to a real estate attorney or title company that you have a relationship with for advice. They should be able to get all of that figured out quickly for you. 

@Kevin Norgaard This really boils down to what is in your purchase and sale agreement. If it says in the contract that you have to do the final walkthrough in person and not doing so is a default or breach of contract then yes, you will have to be there unless they are willing to waive that provision. If it is not in the contract you signed then no, they cannot force you to be there AND if they back out of the deal because of it you can likely sue them for specific performance. 

If you have a contract or real estate attorney you should run it by them. 

@Kristi Tietz

Gator lending can be an excellent way to make extra money, but I agree with some others in here that it may be more of a business model for experienced investors. As a nationwide transactional lender, we get requests all the time for gator lending opportunities and a lot of them end up being a little sketchy. I would say that if you have a great relationship with your investor and you know that if things go south, they will pay you back, then you could potentially move forward with the deal.

If you'd still like to move forward as a gator lender then there are 3 main things you will want to focus on:

1. Is the title company reputable - this part is easy

2. Do you FULLY & COMPLETELY understand the contract - this is the key. You will want to make sure that you are aware of any and all deadlines and fully understand contingencies. You will want to make sure that you have the right to exercise those contingencies in the event that you need to back out to get your escrow deposit back. 

3. Contract with your borrower

So being a "gator lender" on a down payment can be an excellent way to earn money, but the "gator" would need excellent credit and a track record of successful deals closed. This is typically called a sponsor or guarantor on multifamily or commercial deals. This practice is very common on commercial and multi-family transactions, but not as common on single families, and that is typically because of the lender. 

As a transactional lender, I get frequent requests for gator lending or down payment assistance. I am always willing to fund the transaction but in order to do so we have only 1 condition, and that is disclosure to the end lender. For commercial and multi, this is never a problem, but for some reason, in residential this seems to really freak out lenders. In my mind, I think that as long as the lender is getting the equity, why would they care about where the down payment came from on an investment property but that's not how they view it. I have only had a handful of successful borrowers close a deal on a SFR with down payment assistance and in all of those cases they were working with lenders that approved it.

@Elizabeth Conklin

Look into some institutional/private lending options. Local private money lenders tend to be more short term and costly, but have the least red tape. Institutional lenders like Kiavi, RCN & Lending home would be somewhere in the middle of a local private lender and Fannie/Freddie. Many institutional lenders will only require a soft pull, or only 1 hard pull per year instead of before every deal. A lot of the institutional lenders will have pretty good rates too, but not as good as fannie/freddie. 

If your score has already been pulled for this HELOC then you can't do much to reverse it, but it should only lower your score by about 5 points or so. The drop in points fall off your report after a year, and the inquiry falls off after 2 years.

I would definitely look into using an LLC for future purchases so that you can use institutional lenders.

@Nayron Henderson

You can definitely wholesale properties on the MLS and I personally think this market creates a unique opportunity to do so. I read an article last week on Redfin that highlighted the fact that 16.1% of homes fell out of contract in July this year, 63,000 homes! That's an alarming number of homes falling out of contract and sellers are really feeling the market changes now. Homes are sitting around longer and buyers are realizing that they have options.

My suggestion would be to set an alert to receive notifications when properties go BOM (Back on Market). From there, you will need to take more of a shotgun approach. Throw out tons of offers. Be embarrassed at how low your offers are. Send out 50 to get 1 accepted. Eventually you will come in contact with a seller that is over-correcting. You are looking for the seller that has motivation to sell quickly and dealing with the stress of falling out of contract. Your quick, clean, cash offer can be just what they need, and they are willing to trade equity for it. 

Taking all of this into consideration, you will need to make sure you are getting an exceptional deal. I would shoot for 65% of ARV or less. Investors don't like seeing deals from wholesalers on the MLS. The one exception would be when the numbers are really good. Also keep in mind that investors are also aware of the current market conditions, so they will be more conservative with their numbers and want to buy better deals. The days of 80-85% of ARV deals are gone, or at least on pause for now.

Good luck out there!

Yes, thats correct if you are planning on assigning the contract. If you are doing a doing a double closing you typically will want to sign a PSA with your seller, then a new PSA with your end buyer. You would do this in circumstances where you cannot assign, like selling to a hedge fund buyer, selling a HUD home or in circumstances where you do not want to disclose your fee to buyers or sellers.

Hey @Joseph Wheeler, I'm based out of Tampa as well. My office is actually off of Westshore & Laurel, by International Mall. Just about any area in Tampa you can find a buyer, the market here is on fire because we've had so many people move here over the last 2 years. Tampa is also 100% built out, so builders can only add new inventory by building up (condo buildings, etc), so inventory is constricted and demand is way up. 

Some areas that investors love include Seminole Heights, South Tampa, Hyde Park, Westchase, Riverside Heights, Ybor City, Carrollwood & West Tampa. You really cannot miss in any neighborhood in Tampa, even the rougher neighborhoods have tons of investor activity. 

I also buy in Tampa, so if come across anything good shoot it over!