All Forum Posts by: Charlie MacPherson

Quote from @JC Johnson:

If you buy leads from Bigger Pockets, they actually refund you for all these people.  Just FYI, even this platform considers those "leads", not leads.  They are not actual people, also, wholesaling should be considered fraud.   Submitting an offer with no intention of buying a property should be considered illegal, to remarket it to another party, and the seller and listing agent lose control of their transaction.  Do not accept assignable contracts or small deposits on RE transactions. 

Submitting an offer with no intent to go through with the transaction is already illegal.  It a tort called "Fraud in the Inducement".

That means that the wholesaler used deceit or trickery to induce the other party to sign a contract.  https://www.upcounsel.com/fraud-in-the-inducement  That's exactly what they do when they put a property under contract and only intend to sell their position in the contract, after a hefty markup.

Being a tort means that it is a civil infraction, not criminal.  That means it's up to the injured party to sue the wholesaler.

It's not just in real estate.  I'm seeing the same garbage in business brokering too. 
Over the last few months, I've received a handful of genuinely stupid offers. 

Here's one I received on an equipment dealer that's been in business for 70 years.  Asking price is $4M, based on $7M in sales, $1M in assets, $2M in inventory and $1M in net revenue.

This knucklehead wants 100% owner financing.  $7M in sales, $1M in annual net income.  ZERO skin in the game. 

On a hunch, I looked into YouTube and sure enough, just like the wholesaling gurus, there are quite a lot of videos that tell people how to become rich by buying a business with (wait for it...)  NO MONEY DOWN.

There should be a bounty on these supposed "gurus".

Highly motivated sellers are ready to take a MASSIVE haircut on their sale!

I'm representing a retail business that is for sale along with 6 rental properties and a vacant lot in northern Maine. 

It is fully staffed, but probably not the best fit for 100% absentee ownership.

The business is profitable.  They sell feed for pets and livestock along with local produce in a farmer's market setting. 

A very large portion of the business is receiving packages for 8,271 Canadians who find it much less expensive to have their goods shipped to this location and for them to come across the border to pick them up (for a fee) than to have them shipped directly to Canada. 

The seller states that they are adding an additional 50 customers per month.

At my recommendation, the sellers have increased the charge for receiving packages from $3.00 each to $4.00 each.  The only feedback from customers has been "what took you so long?"  That change took effect on 1/1/2024.

As a result of this change, the sellers deposited an extra $9,447 in January 2024, $7,675 in February 2024 and $10,000 in March 2024 alone.

That's on top of their usual earnings.  This is just the additional sales vs the same month in the year prior, due to the long overdue price increase.

There are 6 rental properties owned by this business that are being sold along with it..  They are mostly furnished apartments that are rented to professionals.  There is also a 0.8+ acre lot that seems to be suitable for development.

Some apartment photos can be seen here: Photos.

The adjusted (for the new income stream) asking price is $1,102,916.  That is all-in.  Business, inventory, assets, real estate.

Here's the opportunity:  The seller's have located their dream property in Honduras.  They need to sell the business and assets quickly in order to close on that property.  They are reducing the price to $915,000, all-in.  That's a $187,916 reduction.

This price is not negotiable, nor will they entertain any seller financing.

If their dream property get sold out from under them, the price will go back up.

Interested?  Call me at 207-352-1000.

Charlie MacPherson, Business Broker
Inbar Group, Inc.
12 Shuman Ave, #10
Augusta, ME 04330

Former Realtor here, so no dog in this particular hunt.  It really was always negotiable. 

I can't count how many times I met with a seller and said my commission is X% (and I'll pay the buyer's agent out of that), and they replied that so-and-so says they only charge Y%.  Can you beat that?

At that point, I recalculate.  I have to decide whether I take less, offer the buyer's agent less of both or walk away from the listing.  I have done all of the those, based on the circumstances.

I also can't count the number of times in mandatory training / continuing education that I was told that we were never, ever, under any circumstances to discuss setting "standard" commissions with other agents.  In fact, in my pre-licensing course in Mass, the instructor said that if we were ever in a setting with other agents, like a gathering at a bar, and someone said something like "you know, we should all agree to a minimum of Z%" that we were to loudly and publicly excuse ourselves.

Business brokering is so much more fun - and we charge a lot more commission too!

Former Realtor here, so no dog in this particular hunt.

I have always viewed NAR as a cartel.  In Massachusetts, I wasn't required to be a member and wasn't for a while.  However, the discounts on MLS fees paid for most the the NAR dues.  

When I moved to Maine, NAR membership was required for MLS access.

NAR likes to push a narrative that members are held to a higher standard than non members.  Baloney.  Nearly everything that was in the NAR code of ethics was replicated in state law.  The COE is NAR-inspired fiction.

In fact, the NAR code of ethics required that when asked, I had to disclose whether or not I had other offers on the table.  That goes against the interests of my seller, so rules or no rules, I refused as I was a fiduciary to my client.

It always seemed to me that NAR was in it for the money.  $500+ each year for dues is a lot, especially when you're a new agent who is trying to figure out how to pay desk fees, business cards, continuing ed and soul-crushing marketing costs.

One piece of particularly irritating bullcrap in the media reporting though (big surprise, right?). 

In every training session I attended it was POUNDED into our heads that there was no such thing as a "standard" commission.  If we found ourselves in a discussion with other agents, where they said "we should all agree to charge X%", we should loudly and publicly excuse ourselves from that discussion.  Price fixing was taken very, very seriously.  Commissions were 100% negotiable.

I wonder though, in the end whether buyer's agents will be necessary.  

If I were Joe Homebuyer and saw the listing on Zillow, why wouldn't I call the listing agent?   That agent still has to disclose known defects and treat me fairly.  Retain a real estate attorney or title company and I'm getting pretty much the same representation as with a buyer's agent.

If anything, I see this as a threat to buyer's agents, who may well find themselves disintermediated like travel agents and neighborhood stationery stores.

I'm a business broker and I have a buyer for a business I have listed for sale (somewhat north of Portland).

The business being sold is a party / tent rental company in business since 1998. They provide tents, chairs, tables, dance floors, etc. for weddings, corporate events, fairs, family parties, and anyone else who needs tents.

High level numbers for this company:
Sale Price: $220,000
Gross Sales: $220,000/year
Cash Flow: $122,000/year

The buyer has recently purchased a bakery, which could be a good synergistic fit, each company benefiting from the other. Due to the recent
purchase, the buyer's SBA borrowing ability is limited, so I'm looking for an alternative.  He has $44,000 cash for a down payment.

There is no real estate transacting as the buyer already has a location from which to run the tent company.

The buyer may be able to offer his personal residence (appraised at $436,000) as collateral, but part is pledged against the bakery purchase. The seller is guaranteeing that he will have at least $60,000 in orders booked for the upcoming season by closing.

If you want a place to park some money, please contact me and I'll put you in touch with the buyer.

PS - I am not looking for any sort of compensation or cut of the lending fees. I just want to get this business sold!

Nice place, but watch out for the Burrowing Owls.  These little owls literally dig into the ground to make burrows for shelter.  They are very, very protected in Cape Coral as it's home to a lot of them.

If you are looking at property, be sure there are no burrowing owls there.  You cannot relocate or even disturb them.  Nests are typically marked off with 4 wooden stakes and have plastic / caution tape wrapped around the posts.  

You don't.  Wholesaling only works if you can find a seller who is so desperate that they'll take a bad deal to get out of whatever situation they're in.  That or someone who is completely ignorant about the true market value of their property.  In other words, a sucker that you can take advantage of.

A bank who is auctioning a property isn't going to fall for your lowball offer.  A seller in pre-foreclosure might be desperate enough for you to screw them out of whatever equity they might have - but chances are pretty good that they'll have little or no equity.  If they did, they'd sell the house with a Realtor and get full market value, which would help them an awful lot more than your lowball offer.

Maybe get into rehabbing.  You take a bad property and make it into a good property.

The seller wins by getting rid of a headache.  The neighborhood wins by making an eyesore attractive again.  The buyers win by getting a newly rehabbed house.  The town wins by getting a derelict property back on the tax roles.  You win by making an honest profit.

That's a win, win, win, win, win.  Everybody wins.  (And you can sleep at night)

There are a LOT of lenders that will write SBA loans for a gas station.  You can most likely combine a 7A (prime+2%, 10 years) on the business component of the sale and a 504 (Prime -2%, 25 years) on the real estate component.

Be prepared to pay for at least an EPA Phase 1 inspection and depending on the outcome, a Phase II.  If there are any findings of contamination, proceed with extreme caution or you could find yourself on the hook for a very expensive cleanup.

Also investigate the age of the underground tanks and what the state requirements are.  Here in Maine, new tanks (double-wall, usually fiberglass over steel) are permitted for 30 years (the length of the warranty) and can extend another 10 years with a passing inspection.

Good luck.  PS - I have a couple on the market in Maine!

You can request it, but why on earth would you invest in or work on a property that you do not yet own?

Sure, it's under contract, but there are tons of things that can go wrong between now and closing.  Seller gets sick.  Seller dies.  You lose your job.  Fire damage to the property.  Interest rates spike making a good deal not so good anymore.  Flood damage.  A tree falls and wrecks the roof.

That list goes on and on ad nauseam. 

If something happens and makes the closing either impossible or undesirable, you lose whatever time and money you've put into that property.

Worse, if damage or loss to the property can somehow be traced back to work you or your contractors did, guess who is getting sued.  Yep.  You are.

I hope that's enough to convince you that working on a property before you own it is a HORRIBLE idea.