All Forum Posts by: Chuck Prime

Ok, got it. Thanks, guys. Will call title in the ayem and see what the laws and the options are. Will probably have to call the IRS too. Grrr....

Ah, PERSONAL liens that would follow me around. Good point. Thank you.

The thieves at the IRS aren't happy with me these days, so I will check that out. My biz hit the skids in the middle of a year, so I didn't make enough extra in the 2nd half to pay the taxes on what I made in the first half. And I haven't made enough since then to get caught up.

I'm in Phoenix. The bubble burst harder here than almost anywhere else. It's REALLY bad. But we should recover fairly well, given a little more time.

I have no idea what AZ laws are on this. Will ask my title lady.

How is it that I'm asking my co-buyer to forgo title insurance? I would never ask such a thing.

The deal would close normally with BOTH of us as buyer. Title reports and all would still be run. The difference is that after closing, he buys me out. That's really all there is to it.

Except he doesn't know me, thus isn't sure that I will keep my promise to sell. I'm trying to get him some security saying that I have no choice about it.

For wholesalers, here's a way around funds proof requirements on those shortsale/REO deals - IF you know your buyer.

Use a standard Addendum and add him as co-buyer on your original purchase contract. Now you're both buying the place, and the banks can use his funds proof and such instead of yours. After closing, you both go to a notary (best place is your bank or his) where he pays you cash in place of an assignment fee to deed all your interests in the property to him. Bingo. Done.

No hard-money hassles or expense. No BS. Pretty slick, eh?

Yeah - when you know your buyer. I've done it my last 2 deals. But my buyer for the current shortsale is someone new. He has no assurance that I will in fact deed my interest to him after COE, even though he knows I need the money.

We can't write it into the contract, because it's an after-COE arrangement. We could probably draw up an agteement and file it with the county recorder, but he's kinda "meh" about that. And this current shorsale is a condo, for which ALL my buyers would be new.

Anyone got any suggestions? I need a bright idea to fix my bright idea.

Thanks in advance!

Glad you were able to get it done.

But for the record - at least here in AZ - unlicensed buyers can and do pay assignment fees to unlicensed wholesalers all the time. That's how wholesaling works.

I'd imagine that unlicensed sellers can too, but I've only ever gotten paid from one seller, and that was outside of escrow for unrelated reasons.

Chuck Prime

Get the billboard/TV guys to send you leads for property types they get calls on but don't deal with. Build your buyer list, wholesale those properties, and pay the billboard guys 20% of what you make. That's the best lead source there is because you're coat-tailing on their 15k/month ad budget.

Nobody in Phoenix has an ad budget anymore, but it was nice while it lasted. I was the go-to guy for mobile homes for about a dozen Homevestors franchises and a few other locals with big ad budget.

For anyone else in Phoenix: I'm BACK doing mobile homes now, along with mobile home parks and other multi-unit properties if the CAPs are high enough. Send 'em if ya got 'em. Greater Phoenix area only, and I mean that.

@Prince - You can't be doing this well by just targeting absentee owners as such. You've gotta be hitting absentee owners in foreclosure or in some other distress situation.
In any major metro, you should be able to get NOTS lists off your MLS, or from 3rd parties who compile them immediately as they are filed at the County.
And some County Assessor offices will run just about any search you want for $100-200-ish.

@Realtyman - direct mail IS a time-waster if not specifically targeted and appropriate for current market conditions. And personally, I avoid sales pitch bs and useless guru-speak filler text like "bankruptcy, foreclosure, divorce". They know their situation. I use that space to tell them simply and clearly them what I do, else I leave it blank.
Many title companies used to make up free postcards off the county NOTS filings (you'd pay only for stamps). Maybe they still do. I never used them just because I'm a control freak about my stuff.

@Joel - you didn't tell us which the lower volume mail days are. I'll call the Post Office, because I never actually bothered to check on that before.
Scary thought about lazy carriers slipping postcards into the junkmail. Homemade postcards are good enough otherwise for low to medium residential properties.
Just who are you going to mail to for A YEAR? Tired landlords and owners of vacant properties is about it. The other stress situations are generally resolved by then. Yes, some people rescue themselves from foreclosure only to fall back into it, so just always mail to the current NOTS list and you'll catch them every time.

@Sean - more power to those who can do deals from probate. I worked it just long enough to learn that the people who step up to be PR are the responsible ones who aren't desperate sellers, and that the probate attys I targeted told me that rarely did anyone open probate unless they already had a buyer.
Maybe you know something I don't, but to me the "JG Banks" kind of PR list is absolute crap. You gotta get in earlier than that. I was working Death Certificates for a while (targeting the "Mail To:" names), but then I started up the mobile home referral thing, and just showed probate the door.

@Jack - I can't speak for Sean, but on the MLS I use there's a sub-system called "IMapp" which pretty much rules the earth. Original loan date is one of the 50 or so fields in the .csv files I download and process in MS Access.
But as said to someone else, many County offices will run searches for a couple hundred bucks.

Thanks as always.

Steve:

I appreciate the link, but my problem is getting the seller under contract in the first place. I have to find a solution to that, and I ain't giving up.

Don:

I agree that a commercial market exists for good wholesalers. Certainly there's a fairly common need, and if that ain't a market, I don't know what is.

Yes, neither sellers nor buyers/brokers are generally receptive to me. "Once bitten twice shy" makes sense. I could definitely try to counter it with the deal history. Last week I already put a half-hearted version on my website. After closing, I can ask my sellers if I can use them as references. And I can ask the 2 I've already had. That's a weird request, but probably worth a shot. Thanks.

Are sellers reluctant to leave money on the table, or reluctant to admit that they need a wholesaler? Either way, maybe this should be my opener: "I'm sure you'd prefer a full-price cash buyer over a reduced-price wholesaler. But I'm a specialist at knowing who the cash buyers are and how to bring them into closing quickly. My offer is carefully structured to make it worthwhile for all of us: for them, for you, and for me."

Someone else suggested that sellers are afraid of accumulating a lot of brokers in the "daisy chain", who the sellers presume they will have to pay. If so, I think a line or two in my purchase contract can fix it. "Buyer pays commission of any broker or agent hired by Buyer." And I've already been approached by at least one agent over that big multiplex - which is not on MLS. I wonder if she expects my seller to pay her.

She also volunteered out of the blue to sign what I guess is supposed to be a non-circumvent agreement with me. I don't know...

Do non-circumvent agreements actually offer any protection, especially since they don't make you a principal in the deal?

Thanks again, guys.

Financexaminer:

You're right that I need to build a rep, and that there should be Who's Who groups around here. But still, many buyers and sellers are out-of-state and even out-of-country. Many deals with them would be once-only, and they don't know many local people. Maybe I should build a reference sheet, and I already halfway started one on my website. But wouldn't that be kind of cornball and amateur? Of course people do sometimes keep SOLD listings on their website, which is pretty much what I started doing. Hmmm...

Don:

Yep, you get the picture. And yep, I have two distinct commercial mailing lists both of which are handpicked, one of which is very unique and brought the buyer for my very first commercial deal. I also have other marketing outlets that many people don't use.

On beating up prices to make room for me, I sure do, and I also do it to make profitability for my buyers. I can't move overpriced properties or bad CAP rates.

On my offer being weak, absolutely, but I only target distress situations, whether commercial or residential. I should have mentioned that upfront, but I just assumed it would be understood. I don't target new listings or stuff that's likely to be marketed well without me. I try to know when I'm needed and when I'm not. Usually I'm not, so I don't waste time on those cases.

Because I target distress situations, I essentially target sellers and brokers who DON'T know what they're doing, else they wouldn't be in distress. But they keep beating their heads against the same brick wall, getting the same results. Heaven forbid they try something new, like locking in for a while with a wholesaler.

Just a few years ago, "creative real estate investors" (and gurus) were developing counters to "seller objections" raised by homeownwers. Most such counters were legit, and most worked. Is anyone doing this with commercial, or do we have a chance to blaze a new trail here?

Hmm. Maybe that's part of the problem: maybe these commercial people haven't had their assumptions challenged.

First, we need to find out what their assumptions and objections really are. I guess that's why I'm here. I'm way too new to figure it out on my own.

Thanks, all.

No license for me. I don't submit to governing boards on several principles, one of them being that when they license you, they own you. I saw that fact put into practice when a friend of mine had a vindictive ex-wife who caused him to lose his license over issues that had nothing to do with the honesty or propriety of his business dealings. She wanted to hurt him, and used his licensing to do it. Well, power corrupts, and licensing is a powergrab if ever there was.

Plus there's a ceiling on what agents can make per deal. And there are issues with paying finder fees. And on and on. I won't work under political constraints. I deal with people voluntarily through open incentive (when I can offer it, that is). I don't deal with people by force of law.

I didn't ask the Board about anything, and not everyone who's being difficult is a licensee. But one realtor did say she'd sign a non-circumvent with me. Do you think it's worth relying on?

As a recent residential wholesaler in Phoenix, I don't have a lot of cash to work with. I'm hoping to change that and actually make something of myself.

I know little about options. These sellers don't seem to want me locking them into anything at all, but of course I'll give it a shot when I know more. What about an option would incent these sellers to sign with me when the contract won't?

I structure like this: buyer is me and/or Nominee, contingent on successful assignment to Nominee, earnest $ to be deposited by Nominee when named. The title co handles it all and dispurses the Nominee's funds to pay everyone. My assignment fee shows up on the settlement sheet. The rest is all specific to each particular deal.

Yeah, I kinda suspected the cut-out risk was more when the total $ amounts are so much higher. Plus my buyers and sellers aren't always local - that realtor I mentioned represents buyers from Canada. She's local, but what will the buyers lose if they make an enemy of me? Or of her? They have less incentive to stay on our good side.

I'm a wholesaler in AZ. I'm new multi-family, but have wholesaled SFRs for over 5 years. I write purchase contracts, I assign them in escrow, and I show up on the HUD. I'm careful. The vast majority of my stuff closes, and always has.

So far I've recently worked my first 2 commercial deals and brought successful buyers for both. But I've found an underlying problem.

Most sellers of multiplexes won't sign a purchase contract where the buyer is "[my LLC] and/or Nominee". And some agents with high-DOM listings actually advise their high-DOM 'sellers' against it. These people don't believe in wholesaling, so I'm left with no protection against being ripped off.

Commercial sellers say, "Bring me a buyer BEFORE I sign with you. I won't cut you out."

Commercial buyers say, "Give me the property address BEFORE you have a contract. I won't go around you."

The sheer gall is astonishing.

I won't trust people who are unwilling to let me protect myself. So I'm missing out on a 62-plex I'm confident I can get done if the due diligence checks out. (The CAP looks to be just under 12% at 10% vacancy - still trying to verify.)

Currently I'm withholding the address from all potential buyers until they make a good-faith and temporarily refundable deposit. (Yes, the title co will do it.) I already gave them all I have (pics, numbers, etc) except parcel# and address. If they make the deposit, I get my contract, it goes to title, the buyer gets the address, and all goes normally from there.

Except they won't do it, and my seller won't sign WITHOUT them doing it. And even if either side eventually plays along, this reticence seems to be the norm.

I need a secured position or something with the same net effect that sellers and/or buyers will actually go along with. When that happens, some of you will benefit from the deals I can throw your way. Until then... !

Many thanks for whatever y'all can tell me. Really.