All Forum Posts by: Ryan Harthan

Hey Morgan!  What are you looking to do?  Are you looking for a company to work for, to buy from, or to sell to?

@Matt Huber I think some of what you're seeing has to do with some different factors. I've worked for New Western in two, kind of three major markets from San Antonio to Austin and now Tampa. The 70% of ARV adage that has been popular for the last two decades has really become outdated for a number of different reasons I've talked about on my blog before.

I remember when my dad was a real estate broker in San Antonio back in the early 90's. There was no such thing as MLS. Every morning he'd get a fax in with all of the updates to listings and then have to go into this gigantic binder to physically take out the old property sheet and put in the new one. I really don't understand how anything got done back in those days. With the introduction of MLS systems the market inherently became more efficient. In the 2000's when sites such as Zillow and Trulia popped up it then gave the power of information to the hands of the every day consumer. Before that in non-disclosure states such as Texas, one essentially had to use a real estate broker in order to gain access to data not readily available to the public. The introduction of these two sites made the market even more efficient. As economists will point out, when you give buyers and sellers access to critical information about pricing that was not available beforehand the wide margins at which savvy buyers were able to take advantage of less educated sellers begin to tighten up. That being said, there are still those type of deals available but just much fewer and farther between.

The concept of wholesaling has been around since the introduction of a market economy.  Buy something and sell it for slightly more than you paid for it.  If I knew more about boats or cars I'm sure I could buy and sell those too.  The popularity of Guru's and the notoriety via television that rehabbing and investing in real estate has gained in the last decade has increased the amount of buyers in the pool, as you suggested.  Decreasing supply therefore increases pricing.  Additionally right now we're seeing historic availability in the credit markets with the Fed funds rate being virtually zero.  This access to cheap capital has increased the potential buyers in the pool as well.

Finally to address some of the blame you think we may have. Wholesaling has traditionally been a very disorganized market. Being able to trust a valuation or a rehab estimate from dozens of different independent entities who may have varying degrees of experience and who may or may not be licensed was difficult. The investment brokerages that have sprung up have become so popular because of the organization and consistency that we bring to consumers. Having worked here for over five years and been doing this my whole life I can tell you that I don't remember a time when the market was ever truly selling at 70%. It's kind of like I remember getting gas for under a dollar a gallon when I first got my drivers license. I know it happened, it's just kind of been a while and I don't think it's going to go back in that direction. San Antonio was seeing about a 72% market in the middle of the recession (like 2011). Tampa consistently sells at 79-81%, Dallas and Ft Worth operate at somewhere around the same margins, and Austin as far as I can tell has ARV's that are almost entirely based on appreciation. While large companies like us are fairly visible to investors in the market we make up less than 5% of all investment transactions that take place. I track hundreds of houses in my market that I consistently get beat on by investors willing to pay more than me for the same property.

I do agree that another adjustment in the market will weed out some of the inexperienced investors who are evaluating their deals too highly.  I also see a shift among the institutional buyers right now that entered the market building massive rental portfolios now beginning to liquidate some of their assets.  I think by about this time next year we'll start to see some fundamental changes in the way major markets function nationally.  

I don't understand how wholesalers do their job WITHOUT a license... How are you valuing a property? How many other real estate agents time are you wasting submitting offers? If anything I think it gives you the credibility and knowledge on the selling side to prove your numbers are legitimate and that your buyer is getting a deal they can actually make money on. Though I'm not currently licensed in Texas I have been for years and have been a land lord my entire life. From what I've been told, again not an attorney, you're legally required to disclose you're a licensed agent on all transactions that you have an equitable interest in. If you're selling your personal residence you need to disclose your license status. Most MLS's have a box you can check if the seller is a licensed agent or not.

Having a license actually protects you in my opinion.  There isn't a ton of legislation on wholesaling in Texas but one wouldn't have to stretch the imagination to say that marketing properties you don't actually own could be performing the duties of a real estate agent.  Writing up your own contracts can, in some cases, be considered acting as an attorney.  In Florida either of those two acts is actually a felony.  No one ever gets in trouble from disclosure.  It's when you don't disclose that questions of ethics come into play.  

As for robbing someone, the market value of a house is what someone is willing to pay for it given the terms of their offer.  If the seller needs cash in a week because he's getting foreclosed on and the foundation of the house is split in half the market value of that house is going to be what someone is willing to pay for it.  In college we called that Efficient Market Hypothesis.  Now that I'm thinking of it, I have a degree in real estate from the University of Texas.... I certainly don't need it to do what I'm doing but it does add quite a bit of credibility to what I say and has certainly helped me through some more complicated transactions.

@Anderson Schulle I can't speak to the business practices of any other companies in the industry but as an employee of New Western I'm curious about one of the things you mentioned.  As a company we decided about two or three years ago to not throw bandit signs across the fourteen offices we now operate.  If you did in fact call a bandit sign and were somehow connected to one or my colleges I'd like you to PM me so we can resolve whatever may have happened.  While we are are technically independent contractors we impose very clear guidelines on our associates on what is not only an acceptable way to conduct business but a more professional way which clearly outlines forbidding the use of bandit signs.  

To address your other contention, I'm sorry you feel that our figures on both rehab estimates and ARV's didn't come out exactly where you had hoped. But based on how you phrased it it seems like after doing your due diligence on the resale values and after inspecting the property yourself you still decided to move forward with the transaction. In my experience it seems that an inaccuracy in our estimated figures typically tends to work out in the benefit of the buyer. I can't, however, run someone's entire rehab for them.

Like any business, I loathe the idea of a dissatisfied customer.  I came from our San Antonio office and helped open up our Tampa/St. Pete office.  If there's any help I can add to make your next experience with us more pleasant please let me know!  Putting out a competitive product that someone can make money on is clearly objective number one.  Having a customer that we can build a long term relationship based on a superior level of customer service is equally a number one priority for us!

If it's in South Saint Pete then that's pretty average... haha!  I try and get out and knock on the door, I'm way more likely to convert once I'm in front of someone.  But if they don't answer I keep a list of addresses to follow up with when I get back home.

Howdy @Kevin Bupp!  Someone actually asked me about mobile home parks today here in St. Pete.  I'd be interested to hear what your experience has been so far looking for some, I don't really know a lot about them.  The multi-family side seems to be pretty competitive here but there are definitely areas that look good depending on how far away you're willing to buy.

Sherman Bridge is worth a look.  They had a 7% 2 point program in Texas, I think the Florida one's a little different.  I worked with a guy named Travis Alexander, really sharp.

I'm a realtor but only work for myself... Sometimes you know when you hit that send button you're going to get a call telling you to go F yourself... But I've always said, if it doesn't hurt you a bit inside to hit the send button you didn't offer low enough...

Welcome @Julius Forte!

I'd like to think of myself as a seasoned investor in the San Antonio, TX market.  I went to college for real estate finance at UT - San Antonio, inherited a dozen rental properties from my dad at 19, lending private funds at 22, learned how to wholesale at 23, started flipping at 24, owner financing at 25.  

But for some reason I feel really uncomfortable getting out of my comfort zone going to a very sophisticated market such as Tampa Bay. I hear too many new investors reading books about how, "you can only buy at 70% of an ARV", which I've never really paid any attention to. I know that the competition in Florida is intense, my uncle has been doing it in Ft. Lauderdale for twenty years.

I'm moving down for my future finace, if she wasn't the most beautiful woman I've ever met I wouldn't even consider this.  She has a new job opportunity and I told her I could run my business anywhere...  So now, with foot in mouth, I'm actually getting scared about what I'm getting into.  I'd like some BP opinions on what to look for/look out for.  

- What type of margins should I be looking at for flipping houses? In Texas I can buy at better than 70% of ARV including repairs. I don't do a ton but when the Mrs. starts getting irritable I have to get a project to get me out of the house for a month or two... I like the historic-add value properties. What is a competitive percentage to offer at in the Tampa Bay market?

- If I was going to buy a rental, where can I get a decent 4-plex?  Multi-family is crazy cheap in San Antonio so I'm trying to gauge if I should just keep my money there or actually look at buying and holding here

- Are there any Florida specific laws I need to be aware of when seller financing a property?  I typically hold my notes for a year and then sell them.

- I do spend a decent amount of money marketing for property myself.  I don't move on everything but

       - are assignments more preferable because of the stamp taxes?

  - are there good or bad people to talk to about deals I have under contract but would       rather sell off

- As a private lender, what type of rates and terms are in the market?  I'm rethinking my program as the foreclosure laws are WAY different than Texas (you can typically foreclose in less than two months).

Any help would be super duper appreciated!  If you have any Texas specific questions absolutely shoot me a PM and I'll be more than happy to advise in any capacity I can!!!!