All Forum Posts by: Richard Lorenzen

I agree with the opinions here. As a few of you have pointed out, many people are moving in with family and friends and as Brian said, some are leaving the area completely.

With that said, some (or a lot) of this is local. When people move out of one area they are obviously moving into another. As investors, we need to ascertain where that location is. Real estate, as we all know, is very local. Each local market runs its own cycle and each market is in different stages of that cycle at different times. While one location is severly hurting, another may be an emerging market where economic development is occuring, jobs are moving into the area (well, ok, this one's a bit of a joke right now), or people are moving there to take advantage of lower costs relative to other cities.

Like Mike stated, the tricky part is figuring out how events in the macroeconomic environment will affect our local markets (and even more difficult, the timing of these effects).

In closing, this is still a time to invest. I'm seeing a lot of great prices out there. Will the prices go even lower? Sure. But that doesn't mean they still aren't steals for a 10-15 year investment horizon. I'm a buyer.

Does anyone have an opinion on the commercial real estate crisis and which areas of commercial it will have the most significant impact on?

Personally, I do not expect apartment buildings to be hit as badly as office and retail space. Rising vacancies in office and retail is largely due to a lack of consumer spending, lay-offs and business downsizing. However, as a result, won't these lay-offs (and high foreclosure rates in homes) cause consumers to downsize from their houses and condos to apartments, and increase occupancy levels in multifamily buildings? That's just my opinion.... I'm not an economist.

Thoughts?

Luis, I just sent you a network request. Shoot me a PM.

Email me. Address is in signature. I'll get you 50% or more off market value.

Ryan hit it on the head. The wholesalers that try to hit a home run every time they go up to bat and reject all deals that are any less than a home run never end up making any deals.

Try for base hit after base hit. Consistency is key. I aim for $5k-$10k per deal. That's much more realistic and you'll be able to sell deals faster and thus do higher deal volume when you're not overpricing your deals.

It depends on deal size. Obviously you're not going to make $15k on a $50k REO in a war zone. Bigger deals= bigger fees.

Why not just use a flex option? It's non-exclusive so he can sell the property to someone else in the mean time, and if you do happen to come up with a buyer, he's got a sale....It's a win-win from his end.

Gary, one question, but not really related to your question...If the property you buy is in your name, the deal is done with your money and you have contractors doing the repairs, what is the role of your partner?

You don't need to specify in the contract that you are a wholesaler. If you don't get a buyer, get out of the contract using your inspection or financing contingency.

I do these deals a lot. I've used flex options, but I didn't like them because if the end buyer is using financing to buy the property the amount of cash he has may be limited which limits how much you can charge him to assign the flex to him.

Drawing up a PSA between you and the wholesaler doen't work if the wholesaler is doing an assignment and not a double close so I didn't find that method helpful. There could be another way around it, I don't know.

The method that works best for me is signing a JV (joint venture) agreement between me and the wholesaler. The JV contract specifies how much my fee is. When I get an end buyer, I have the wholesaler send me the assignment contract which I forward to my end buyer and then get my buyer in touch with the wholesaler. When the deal closes the wholesaler sends me a check for the specified fee.

There are probably other ways to do this, but this is what has worked for me.