All Forum Posts by: Randy Hunter

Thanks all for your thoughtful responses. Let me lay out a scenario for you to poke holes in and tell me it's not possible or legal. Let's say the wholesaler is looking to get no less than $5K out of the deal. And let's say the seller owns the home free and clear, it's a rental property, and for whatever reason, they no longer want the property. They need a little cash for this or that to walk away with. I agree to give them $5K as well, then, the owner/seller agrees to take payments for the remaining balance. 

Is it possible to structure the paperwork in this way? I put 10K down, 5k goes to assignor and 5K goes to seller. The rest is on terms. What am I missing?

Quote from @Jonathan Greene:

This is like looking for a needle in a haystack, but first having to find the haystack drifting somewhere in space. This would be overcomplicating things in order to find a miracle. If you want to buy a property with seller financing, you are most likely going to have to find that yourself because the one thing that most won't tell you about seller financing is that the seller is not doing that type of deal if they don't like you and if you are an ancillary party asking for that, you are nothing to them.

Jonathan, I appreciate the optimism, lol. But, I get it. My first thought about this whole scenario is that it wouldn't work. But then I figured why not ask the question and see if I'm missing something. I understand the vast majority of sellers aren't going to just give their house away on payments to a total stranger. 

Quote from @Nick C.:

This isn't impossible, but it will take an extremely unique situation. To get the property under contract in the first place the wholesaler is promising the seller a quick, cash sale. You'd have to convince the wholesaler to skip over any other cash offers they're getting to go back to the seller to try to convince the seller to take seller financing instead of the promised cash. And pay the wholesaler an illegal commission for brokering the deal. This would take an uneducated desperate wholesaler and an uneducated, desperate seller to pull off. You're not likely to find either with the ease of selling houses these days. 

I'm currently talking to two different wholesalers. One of  them has properties that appear from photos to not need much work, and he's asking for what I would consider close to retail value. Because of that, I don't think their great deals to simply pay cash for but I wasn't sure how to get around that and make it a win-win for everyone involved.

The other person I have talked to, has a better priced deal and also has a personal relationship with the current owner/landlord. Additionally, I think the property may be owned free and clear. When I floated this idea to him, and we discussed it for a minute, he came around to the idea that as long as he was able to make his fee and his owner/friend liked the idea of receiving payments, he'd be open to try to figure it out. I certainly do not want to do anything illegal/under the table.

Quote from @David Avery:

So a wholesale deal is when the owners of the property are in big trouble with paying on their loan.

The wholesalers find out about these deals and approach the owners,  Sometimes 4 wholesalers will  be working a house.  I have emails on the same address from three different wholesalers.   

Wholesaling will be against the law shortly because they practice selling houses.  Only attorneys and RE agents can do this.

Double closings are very , well I have seen almost fights in lobby's of closing companies where this happens.

Can you imagine that your mom was behind in her payments and a wholesaler grabbed her $125,000 equity and sold it and the wholesaler made $25,000 and someone else bought the house and have almost $100,000 equity?

Most wholesalers wouldn't even think about their best friends that have the money to buy it and split the profits with them.  Or buy the house themselves because they have no credit, down payment, ability to get a loan, or brains to figure it out!

It happens all the time.

Be careful when working with whoresalers!

Thanks David. I am confident there are trustworthy wholesalers out there, but I definitely keep my guard up.

Has anyone ever bought a property with seller financing through a wholesaler? I'm sure wholesalers prefer all cash offers or am I mistaken? I figure as long as the wholesaler finds a buyer and they make their fee, what does it matter to them what the financing looks like on the other side? What does that structure look like? Is it possible (and legal) to both pay the seller on terms and also get the wholesaler his/her fee in the deal?

I'm wondering if anyone has ever done this and if so, how did you structure and negotiate everything?

Great story and very inspiring. Needed a little motivation to get back on the horse. The idea that this kind of opportunity is out there if you look for it was just what I needed to hear this morning!

Not sure how I missed this thread the first time around but I'm glad I found my people (and former people) on BP! I'm an Architect in Pittsburgh and obtained my Masters in Architecture and Masters in Business Administration from Kent State. Like many on the outside, I had assumed as an 18 year old looking for a major, that architects were rich, got to draw buildings all day, and were just super cool people. Who wouldn't want that life right? Haha! While I probably would never go back and do it again (cost of college is a complete scam), I don't regret my education or all of the hard work, time, and money that got me to here. I actually do love my job, but as mentioned previously, the money is just not there. Somehow after 1000's of years, we the architects have not figured out how to convert the importance of our job into clients willing to pay us for all the things we bring to the table. But Real Estate can pay us that way and I think the skill set an architect develops is a 1 for 1 translation directly into REI. I spend my days finding and solving problems (that usually involve maintaining a budget), talking and coordinating with a wide range of people, and also feeling lost a lot of the times because yet another brand new issue arises that must be dealt with. This seems to be the daily life of an investor as well. Financial freedom and a total correlation to the skills I already have is what lead me to REI. I'm excited to get my first property and I think that will open the flood gates to the future.

@Jason H. here in Pittsburgh, I have some friends who are super busy at their firms while my firm is beginning to feel the affects of the pandemic. I think it is entirely based on clients. Our primary client is K-12 schools and municipalities. The schools are just trying to figure out how to get kids through the school day so fixing roofs, building new buildings, and renovating interiors have just completely halted. Hopefully some sense of stability starts to take shape after the election, regardless of the winner.

@Gary Swank that's a good way to look at it. Sure, I can probably find someone to rent just about any property. But, is *insert property X here* going to attract the right tenant for me? 

@Jeremy Taggart @Anthony Angotti

Thanks for your lists. A few of those I definitely hadn't considered. Parking in general seems to be a big one and actually was the reason I asked this question. I had found what appeared to be a pretty solid property in every other way but looking on google maps/street views I actually could not see a good parking situation, no matter how I looked at it, and so I kind of checked it off. I know no place will be 100% perfect but I don't want to overlook something obvious on my first property.

What about heating/air conditioning? I know Pittsburgh is full of old homes that have radiators and/or have just never been updated with central air. This was a deal breaker for us when buying our own home but how much do renters care about having central A/C?

I'm aware of Pittsburgh's vast differences in the real estate market from suburb to suburb, neighborhood to neighborhood, and street to street in some cases. But, in general, are there characteristics of a rental property that can make or break a good deal? Are there things to absolutely avoid if at all possible that could be somewhat common in Pittsburgh? Obviously people are attracted to brand new bathrooms and granite countertops but are there any other things to be aware of that have caused you to have a hard time, or a really easy time, getting tenants in your properties?