All Forum Posts by: David Friedman

No problem! Good luck!

If their motivations are:

1. We need cash and

2. We want to sell all of their properties and

3. We will reduce the price if you buy three properties together, then

It seems like you can get a good deal if you buy the three properties. You can probably get an even better deal if you buy all four. Maybe, you can tell the sellers that you will purchase 2 of the functioning buildings along with the building that needs rehab, if they will carry a loan on the 4th property for a couple of years. Then you can put the cash you saved from purchasing the 4th property into fixing the property in bad repair.

If the property is for investing and not for personal use, many people prefer to use an LLC. It is a tool just like any other form of entity (Partnership, Corporation, Sole Owner). An LLC can keep your personal and investment assets separate. Ever wonder how Donald Trump strategically goes bankrupt so many times and yet he is personally very wealthy? He uses LLCs and Corporations to protect himself and his personal assets.

In my opinion, an LLC is worth getting before you purchase your first property.

As far as getting traditional financing, if you have a property owned under an LLC you might have to personally guarantee the loan. At that point you are crossing the line between what is personal property and what is owned by your LLC.

If you can bring a deal to the table (An actual deal. Plenty of wholesalers have no clue what comps or ARV means) you will get investors to work with you. I would see if an investor will let you shadow them. Find out what it takes to do a flip or analyze a buy and hold property and then use that knowledge to gain capital investors. Your track record is going to be very important from here on out. Don't ruin your reputation to make a quick buck. Do what you say you will do and an investor out there will appreciate your work ethic.

I can answer the "Dealer" question:

I believe that for tax purposes, a dealer is someone who flips 5 or more homes in a year. You should talk with a CPA who understands the legal terms.

Some people, such as myself, look at properties on a deal by deal basis. Others have very specific criteria that they adhere to. It really all depends on the investor buyers that you have. What are their preferences?

We are all lucky to have this awesome website (BP) where we can gain knowledge on subjects that may be new to us. If I wanted to take on a property that I wasn't familiar with, this would be the first place I would go.

You should be able to do a cash out refi, but there are some stipulations. 

Most banks require 6 months to a year to season the property. Also, some banks will not refinance based off of the appraised amount, but only what you paid for it.

Also, you won't be able to get traditional refinancing unless you have documented income. 

I wouldn't flip the house unless I had a system in place to bring me my next deal. Otherwise you are going to be sitting on your money. If the margin gets too thin, then renting it out is probably the best course of action. It's going to be a lot of effort on your part to rehab the property, only to pay all of the fees associated with selling a property and make too small of a profit.

You should also have a much better grasp on what your rehab costs will be. If I was afraid that I wouldn't make a profit then the margin is either too small to begin with or I won't go through with the purchase. 

I don't mean to seem blunt. This is just my experience.

I do not see due diligence being your main concern when first talking to an agent. Any agent can pull comps from the MLS, or fill out paperwork, or recommend a good property inspector. You should first prepare yourself so that the agent will be more inclined to give you the time of day. If you are buying properties cash, have your bank statements with you when you go to interview agents. If you are financing (Other than Hard Money), understand that many investment properties cannot be purchased with a loan, and also bring your preapproval letter as well as proof of funds to any meeting with an agent.

Assuming you already have financing or cash, you should let the Realtors know that you won't waste their time by making offers that have no chance of being accepted. If you were my client and you wanted to make offers that were 60% of asking price every single time, I would prefer to spend my time more productively. 

Find an agent that specializes in short sales, foreclosure properties or probate sales. Those are the agents that are the "Gatekeepers" to all of the MLS deals. Talk with them, create relationships, and make yourself ready if they bring you a potential deal. It is a two way street with real estate agents. If you can prove that you are capable to purchase a deal at a moments notice, they will love working with you. Make sure you vet any realtors that you talk with. You might even want to ask if the Realtor owns any investment property themselves or if they are an active investor.

Wholesaling a vacant lot should be similar in almost every aspect to wholesaling a SFH or MF. Sign a contract with the owner of the property. Make sure he understands what you are trying to do. Find an end buyer with development experience or someone who is interested in building a house there and wholesale it to them. The only stipulation I can see in wholesaling a vacant lot is that you are cutting down your market of potential buyers. Someone who flips homes, may not have the expertise to develop a vacant lot. Hopefully that answers your questions!