All Forum Posts by: Account Closed

I'm confused.  Why are you sounding the alarm and then promoting your book and coaching program?  Are you trying to be do-gooder or promote your stuff?  

Don't misunderstand me.  I don't begrudge you promoting your stuff to make a living. Moreover, a lot of people jump into wholesaling who weren't properly educated or trained and do practice wholesaling improperly which gets them in trouble and brings wholesaling under scrutiny by the lawmakers.  If you offer training to keep that from happening, I applaud you.  

But I don't understand...if everyone needs a lawyer and a real estate license to be an investor and wholesale, why does anyone need your training?  Are you offering courses to get licensed?

Transactional Funding is a cost of doing business.  Just factor it in.  As Don Harris said above, 2 points is typical (and pretty darn reasonable).

Can you use C's funds to fund purchase from A?  In the good old days, that's what we did.  However, after all the abuse occurred in the mid-2000's, lawsuits started flying.  Attorneys I have consulted have told me there is no law against it.  However, underwriters don't want to do it any more because of the exposure referenced above.

Ways still exist to do it, but the explanation is too long to discuss here.  Like I said above, just consider TF a cost of doing business and factor it into your deal.

I have 10+ years wholesaling.  This question is a classic example of how the podcasts, books and CD's make wholesaling sound so easy. Not that it's hard, but understand those podcasts, books and CD's for what they are: an introduction to wholesaling to get you excited enough about it to buy more advanced training.  They are not an action plan.

To paraphrase what someone else wrote in this thread, hooray for your enthusiasm.  You should be enthusiastic because wholesaling is a lot of fun.  However, at your experience level, you may want to team up with an experienced wholesaler in your area to help you work your leads when you get them so that you handle them properly.  Based on your question, you are at risk of mishandling them and walking away with nothing in exchange for your time and money.

Better to cut someone in for a percentage of something than try to hold onto 100% of nothing.

Please don't take this as harsh, but...
Do you work free?  The answer is probably, no.  Then, why do you expect a realtor to?
She told you she was a realtor and that she was going to send you deals.  Did you think she was just being a good Samaritan?

If she didn't make the relationship clear from the get-go, then she should have been more clear.  That is just good salesmanship, but having a real estate license doesn't mean the person learned anything about good salesmanship.  It just means she has the right to represent someone in a transaction in which she has no interest.  I don't know your experience level, but if you are surprised, it means that she is not very experienced in sales or the business world and should have taken more time to learn about you, but that doesn't make her dishonest, just sloppy.

She is entitled to her commission, and moreover, she probably has to charge one because the broker where she parks her license will probably impute one whether she charged you or not.  I'm not sure how her broker works, but it would not be unusual for the broker to take half of her commission so she actually only gets 1-1/2%.  Not much for finding you a good deal.

Understand involving a realtor is like calling an attorney and asking for advice.  You expect the attorney to charge you.  Expect a realtor to charge you when he or she is involved. I'm not excusing her amateurism, but understand that's the way the world works.

Bottom line, don't begrudge her her fee. It's a cost of doing business and factor it in. Especially, if she is a source of good deals.  Just make sure you "clear the air" between you going forward.

P.S.  I am not a realtor nor do I want to be one.  Often times, I find deals on my own.  Other times, they come from a realtor.  I factor the realtor's commission as cost of doing business.

Thank you for your point-of-view.  I had a license back when I managed and leased commercial, industrial, and retail property for pension fund investors.  I had to.  I was representing other parties in real estate transactions. 

When I became an investor buying and selling properties for my own interests, I let it lapse.  As an alternate point-of-view, here are my reasons:

I have an interest in everything I do nowadays.  In any transaction when I am a party in the  transaction, a license is not required.

It was more of a hassle than it was worth.  Predominantly, the syllabus for the courses themselves and required continuing ed courses are written for the agent who represents the retail home buyer.  They give you the information you need to know to remain compliant with state law but with the exception of a few (like the ones on appraising), really don't teach you anything more about successful investing. The information in ones that could potentially help an investor can be learned elsewhere (or simply take those if you are so inclined).  I found taking them an unnecessary distraction from my business consuming time I could otherwise use running, building, and managing my investment business.

In any transaction, you have to disclose that you are a licensed agent and remain compliant with all the reams of  disclosure paperwork some government bureaucrat created to justify his or her make-work job to create the illusion he or she was protecting the public.  Said differently, as an investor buying and selling for my own interests, it was burdensome and even occasionally confusing to the other party.

You have to park your license at a broker.  That means you have to run all your transactions through your broker and the broker will get a percentage of every one of them.

You have to carry E&O insurance.

MLS access is valuable, but ways exist to access the MLS without having a license.

Now, the courses that teach using the MLS are valuable, but those are not required to get a license.

Please don't take this as raining on your parade.  If you have taken the courses and gone through the steps, you might as well sit for the exam and get a license.  Moreover, many of the people I read about on these forums who are working at wholesaling probably should have a license because they are really operating as agents and not investors, and the way they are practicing wholesaling will get themselves and innocent wholesalers who are practicing wholesaling properly in trouble.  That not withstanding, getting a license is not necessary for success.

Ask all the questions you want.  Talk is cheap and actions are dear.  The proof is in the performance.

Drive by properties the manager currently has under management.  Talk to the owners of those properties best  you can without being disruptive.  If you like what you see and then what you hear, hire that manager.  If you don't, don't.  It's as simple as that.

You don't have to cover the manager's whole book of business, but cover enough to satisfy yourself that you have done adequate research.

I've seen a lot of investors who have a good thing going, pull excess cash out of a property with a loan, and then, get themselves in a bind because the debt service on it becomes burdensome when something changes, like the tenant moving out.

Not only that, but you can mess up the ratios on your balance sheet compromising your ability to get financing in the future.

One of the beautiful things about rental real estate is that your tenants build your equity for you.  Why compromise that?

Another beautiful thing is owning a property free and clear.  Talk about cash flow!  

If you have run the numbers and the cost of the improvement is justified by a higher NOI, then it probably makes good business sense. If it doesn't, then the improvement probably doesn't either.

I'm a big believer in every property standing on its own. I am also a believer in running each property like an individual business.  

Borrow no more than you need to make any justifiable improvements. Use the positive cash flow to 1) build a reserve for unforeseen maintenance you will need to do on the property in the future (like replace a water heater or AC unit) and 2) use the excess cash flow to accelerate the retirement of the debt on the property.

Use the equity you have in the property to build your balance sheet, and use the strength of your balance sheet to borrow money to buy another property not the equity in another property.  That is the way the pros do it, and I can assure you, will favorably impress any lending institution.

I have wholesaled 100's of properties in my 10+ years as a wholesaler. This question concerns me.  It concerns me because Marvin S. may not have a sound fundamental understanding of wholesaling.  I'm not saying he doesn't, I just said might.  Here's why:

Approaching wholesaling or having the appearance of approaching wholesaling as a way to avoid real estate agents is asking for trouble not only for yourself but for us all.

Wholesaling is not a hobby, or a starting strategy, or something for dabblers. It is not a stage for amateur hour.   I can't tell you how many times I read or hear "I'm thinking about getting into wholesaling." My concern is that approach may lead to malpractice. Wholesaling malpractice will lead to unnecessary punitive legislation that will kill the golden goose and adversely affect the wholesaling professionals.

Approach this (or any) deal with this position:  the property needs to be one on which you would and COULD close yourself.  Said differently, you need to have or be able to demonstrate if asked that you have the means to be able to perform on the contract (unless of course, you have a real estate license) yourself.  Otherwise, you run the risk of being called on the carpet for acting as an agent without a license, and you don't want that.  

If you are unsure of how to properly wholesale this deal to which you are referring (and it appears as though you do or why ask the question), partner with someone on it who is experienced and does for the sake of the wholesaling professions.  Better to share some of the golden egg than kill the goose that laid it.

@Cameron Price 

No problem.  It's all good.  :-D

Cold calling is difficult even for the most experienced.  It can pound you emotionally. Most are better suited for a less confrontational approach.

A number of good people out there have some good marketing systems you can use for reaching out to vacant property owners. I think you will find them mentioned here on BP. Use your "driving for dollars" to log the addresses of the properties to plug into one of those systems.

Believe me.  If the seller is motivated, when he or she gets one of these marketing pieces, he or she will call YOU, and you have a whole different dynamic than you calling them cold.