All Forum Posts by: Ryan Webber

@J Scott is right on with everything he said.

In my experience most investors, experienced or not, do NOT consistently and persistently search the MLS for deals. And then many times they don't get their offers in quickly enough. If you will, then you can profit from your diligence, which is exactly how I wholesale MLS deals.

I actually just wholesaled an REO to someone who made an offer on the same property. They put their offer in the day after I got it under contract. I made a nice profit just by getting there first.

Find cash buyers. That's what wholesaling is all about. You are selling to non-retail buyers.

If you want to close on the house yourself with non-transactional funding then you can resell to retail buyers. I would recommend that you NOT do that for your first deal. New wholesalers always think they have a deal, and they don't. If you close on something you think is a deal, there is 94.7% chance that you are wrong and you won't be able to wholesale it (the % is fictional but an accurate estimate nonetheless). Then you are stuck with a house that isn't a deal. You then get to put tens of thousands of dollars into to it just to lose more money or breakeven, if you're lucky, months if not years later.

There is no REQUIREMENT, but any experienced buyer will most likely want title insurance on the property which will require a title company.

I'm guessing you've done the basics of using different death records services online and the newspapers obit records at the local library? I know one of the library's in my town keeps all the old death, birth, and marriage records. I'm not sure if its the same in every town or not.

@ Curt Davis is our resident wholesaling nay sayer. His point is accurate, but he does not communicate the whole picture accurately.

It does require THOUSANDS of dollars to build a successful real estate business, whether that be in wholesaling, rentals, retails, notes, or whatever. BUT wholesaling provides an opportunity to generate capital with little money and/or credit, which you can then reinvest to build your successful business.

@ J Scott is right on. With a budget like that, you will have to focus on marketing directly to homeowners. Driving for dollars, bandit signs, preforeclosures, and FSBO'S.

Each marketing strategy requires a certain amount of time and money. You obviously need to focus on the ones that require less money, but these strategies WILL require more time. Its always one or the other, time or money.

The key is that once you actually do make some money, you MUST reinvest it into your marketing or your business will not make it.

The buyers financing is the biggest issue here. It all depends on the lender. All the conventional lenders I've tried this with won't touch a double closing situation. Once the title work comes back without me on the chain of title, the deal was dead. Now the conventional lenders I've run into will allow assignments as long as the buyer can pay the entire assignment fee in cash and still qualify for the loan.

So the main reason that this strategy isn't utilized more is that most conventional buyers can barely afford the loan they are getting and can not afford paying the assignment fee outside of the loan.

Now years ago, there was one lady on here who would do a payout from the seller's side of the HUD-1 and up the sales price. She would have the seller agree to a lien position against the property for the "assignment" amount. The seller would obviously need to be privy to all the details of the transaction, but technically there is no reason why it shouldn't work.

I personally have never done that and have never heard of anyone else doing it, but she was adamant that she had done it successfully 20 something times.

Here's the difference Bryan. One is openly and agreeably contingent, the other is not. You use how much money the other person has in their pocket as a detriment for how you will perform in an agreement, and I personally don't agree with that in any way. If they have a dollar in their pocket or a million dollars, you should follow what was agreed. Even if that means someone who has less loses or someone who has more wins.

Again Jeffrey, there is now case law in at least one state that references selling option contacts as unlicensed brokerage, though the main reason for prosecution was fraud in other respects.

Brian, you are a trip. I'm glad you're on the prowl busting those unethical investors as you advocate getting foreclosed on by lenders that you're just not in the mood to pay anymore. I feel safer just knowing you're out there.

Let me be clear. The sole thing that I am debating with Jeffrey is the idea that by putting a contingency in your contact that states that you have the right to rescind the contract if you can not find someone to purchase the property from you, will automatically be construed to be real estate brokerage. I disagree that this automatically changes the substance of the contract, and that this is somehow a foregone conclusion. The assumption that this type of contingency makes your contract a listing agreement is an assumption on Jeffrey's part. An assumption that has no case law supporting it in any state as far as I know.

Now with that said, I think Jeffrey's point is something to consider. I have never advocated or used this type of contingency, and I think the basic logic of Jeffrey's argument against it is sound, eventhough, I think his assumption that it is a foregone conclusion that it changes the substance of the contract is not sound. Bottomline being I would recommend using one of the other mentioned contingencies.

As for your comment Brian, yes, I am one of those stupid old fashioned people that thinks not paying your mortgage just because the bank is rich is wrong. I do, however, think that backing out of a contingent contract is ok and is completely ethical. Call me a hypocrite. I personally rarely have any contingencies in my contracts. The only time being when I am putting a contact on a property blind and haven't seen it.

Well, no that's not 'Nuff said. The state of Indiana referenced that the use of an EXERCISED option contract was grounds for prosecution for unlicensed brokerage. They referenced that it does not give equitable interest and prosecuted someone based solely on that interpretation. The actual case was discussed here on BP a year or so ago but I can't seem to find it.