All Forum Posts by: Patrick Ellis

Aubrey, my suggestion would be to steer clear of trading work for rent for a few reasons.  Mostly because it just adds more complexity to two separate and sometimes complex issues, renting and hiring a contractor.  Very few handymen or jacks-of-all-trades possess the knowledge, skills and abilities to carry out all the repairs if many are needed. They may do 2 or 3 well. But the others are generally done wrong or in a substandard manner.  As a longtime contractor in two states, I can't tell you how many times I've hired guys that claim to know it all, only to find that they only know 2 or 3 things well.

The other issue is renting. Once they move in they are protected by all the standard Texas tenant laws. So if they screw up and don't want to move out, you have to evict them. Also, if they decide what they are doing is worth more, or you decide it's worth less than the rent discount, things just start to get ugly. 

In a perfect world it could probably work well. But I'd avoid the sticky situation if possible.

Good luck.

Patrick

I have to agree with Kevin. I've mentored people in the past for a set amount or percentage of deals. I've also offered people the same opportunity to research deals and put in the leg work.  But very few actually put in the work.  If you want to learn in this business, you have really have to put in the sweat equity or just pay to play. 

Annette, you're likely to get a bunch of responses to this one. Some pro-wholesaling and some against it. The wholesalers and the folks who provide a service around the wholesaling business will all be Pro-wholesaling. While the investors that have gotten screwed on deals will obviously be Anti-wholesaling. 

Wholesaling is a way for an individual to basically broker a real estate transaction without being licensed. Depending on the state, it is borderline legal. It started out harmlessly enough,where wholesalers were finding properties, usually distressed, and marking them up comparable to a real estate commissions and selling them to investors who would invest their own money, sweat equity, and time to turn the property for a profit. That's back when it was more simple and the name "wholesaler" didn't have the same connotation as root canal or colonoscopy.  Today, things are a bit different. 

So, while conceptually wholesaling can be a good thing. You know...the whole helping people on both ends of the deal...thing. It can also be a bad thing when you try to out profit the folks investing their money, time, sweat and tears, into a property. Some may say that capitalism for ya.  But other may say it's just bad business.  I've purchased properties from several wholesalers, both big and small. So, I speak from experience on this matter. I prefer to deal with smaller wholesalers as they are not quite as "profit driven" and tend to be more honest with there estimations on things like ARVs and rehab costs.  I hope you become one of those wholesalers. 

Hope this helps. Good luck to you as you move forward.

Patrick

Residential Contractor for full remodels or anything in between.

Emanuel, I do believe you can purchase a second home using a Homestyle. As long as the first was not a Homestyle. You will need to work with an approved contractor on the remodel.  If you need help, we are approved and a preferred contractor for Homestyle and 203K projects.

Hector, that sounds crazy high for what's being done. I am a HUD certified contractor and I know we'd be quite a bit less than that on a 203k loan rehab.

Patrick

Be cautious of the 203K route. I am a HUD certified contractor and we do a few 203K remodels a year. The lender will want a certified contractor to do the work and they in-turn have to work with the lender's inspector for draws, permits, etc. It's not quite a flexible as house hacking and doing the work yourself as you see fit.

Happy to talk with you more if you need more info.

Patrick

Haniel, I'm happy to help.

I hear ya. Seemed like you were pretty upset over the whole thing. Enough so that you chose to blast this guy openly for nabbing your deal.

Alan, If you sit back and watch the Phil Grove events, it's interesting. They have perfected a system for finding the people most capable of paying the ridiculous fees for their classes.  If the stories are true, their training has worked for some people.  But then there are 1000 times more people who have found success by simply reading, talking and taking the first step and buying their first property.  I've told many of my friends and people I've mentored that the best lesson is the first deal you do.  Even if you simply break even on the deal, you'll walk away with a ton more knowledge than you had walking in.

Good luck to you in your journey.