All Forum Posts by: Ryan Webber

I'm not sure if you are referring to me, but I don't advocate and have never advocated using the disputed contingency of finding a buyer. My point is that you are referencing something that is dealt with on a state level as if it is federal. You won't be going to federal court over unlicensed brokerage. Your defendant's chair would be in a state court with reference to your particular state's statutes and case law.

It is not universally accepted, as you state, that because your contingency to purchase a property is based on your ability to find a buyer that a judge will determine you to be brokering real estate. That is NO way universal contract law. Now I am not saying that it could not be argued and possibly ruled that way, BUT it does not fall under universally accepted contract law.

That is a complete assumption on your part.

You should probably RE-state that you are clearly NOT an attorney and everything you so persuasively presented is only your own opinion.

Jeffrey, you are making very specific statements that would not be determined by general contract law but by very specific case law and judicial review. And real estate brokerage laws being state law and not federal, then you would be dealing with each particular state's case laws around real estate brokerage.

Therefore your statements are NOT accurate. Making specific statements about the particulars of 50 different states' case law is ridiculous. There is not an attorney worth their weight in dirt that would even dare to make those kinds of statements.

Now with that said, I have seen a single case in Indiana where an option contract was determined to not be equitable interest and was then construed to be unlicensed real estate brokerage. It was only one case, though, and it was fret with fraud also. It could be used in future cases in Indiana, but that doesn't count for everybody else.

In my opinion, if you are a new wholesaler you MUST, yes that is a MUST, have a contingency clause. If you do not you will FAIL. Bottomline.

You have no idea what you are doing when you first get in this business and the contingency clause is your only hope to be able to last to your second deal.

Now can using it hurt your reputation? Depends. Your reputation is not what get's you deals with homeowners. Now with REO's contingencies won't fly very far anyway so that doesn't really matter much either, but if you were to back out of a contract with a realtor then I would say, yes, it could hurt your reputation.

No it is not a good way to build your business. If it is part of your long term strategy to building a wholesaling business then you probably won't go far either, BUT it is absolutely necessary as a beginning wholesaler. You won't make it without one.

Whether its from 2006 or not, I would say Josh's statement is still completely true and relevant to beginning wholesalers, just as it was in 2006.

Sounds like a great idea. I'm in.

In our current market, you are not going to find many if any buyers that buy across the country like you are wanting. You need to find investors in each specific area. What parts of Texas?

The strategy is called "wholesaling", and I would definitely recommend that you not limit yourself to any one particular way of finding deals (i.e. HUD's).

Wholesaling is about how you sell a house. In wholesaling you would be selling the property to a non-end user (another investor). How you find the deal has nothing to do with it. Whether its HUD's, foreclosures, directly from homeowners, or whatever.

Now as Vena shared "pre-rehabbing" is an option, which I've never seen it called that but I've done it many times. It does help sell the house faster because it opens up your buyer base to more investor's and possibly to ambitious homeowners, but I would argue that it doesn't necessarily give you a higher profit margin.

If an investor goes by a 70% minus repairs formula then doing some of the repairs for the investor does NOT give you more profit unless you are getting the repairs done cheaper than the investor can. They still have to buy it at 70% whether the repairs are $20,000 or $10,000. If you do $10,000 of the $20,000 needed repairs they still can only buy it for $10,000 more. That leaves you with $10,000 more in gross profit but $10,000 more in expenses which equals $0 net profit.

Again that is if you are dealing with an investor who works off a set % of ARV minus repairs. If they work off a different model then it may profit you more. I have some rehab investors that want to make a net profit of however much they have to put into the rehab. If the rehab is $10,000 then they want to make $10,000. Under this model doing $10,000 of a $20,000 rehab could make you an extra $10,000.

Instead of prehabbing to an investor, I would recommend prehabbing to homeowners. Do enough of the rehab to make the house livable (mechanicals and maybe lipsticking it by cleaning the carpets and a fresh coat of paint) and then list it on the MLS at a discount of comps. You will have to hold it longer to sell it to a homeowner versus wholesaling it at a deeper discount to an investor, but your profit margin will be higher.

The issue to consider is that when you go to all the trouble of closing on it and rehabbing it, why not just go all the way and retail it yourself for the maximum profit?

So for the last month I have been hounded by Kenny Rushing's sales staff, first by emails that I have opted out of several times, but then by phone calls.

I just hung up from the 4th or 5th phone call from them. One of the high pressure sales supervisors ended the conversation by telling me that I must be lying about my investment experience because I don't want to go to Florida for Kenny's Big Seminar.

:wowie:

I hate high pressure sales. If its that good of a product, KENNY RUSHING, why do you have to push it so hard?

Those types of sales tactics make your company look bad. I for one, will NEVER attend or promote your services, and I will ALWAYS actively communicate my negative experience with your high pressure sales staff for the rest of my investing career on any and all investment forums that I'm a part of, which happens to only be BP. Which fortunately for you is only ONE investment forum, but unfortunately for you is the BEST investment forum.

Ok I had to vent a little. I feel better now.

LOL

Just look in the phone book and call and ask. Most title companies will allow assignments. Assignments are extremely common in commercial deals and really shouldn't be an issue for any title company. I've actually never heard of a title company not allowing assignments. Now some title companies will not do double closings but that is something totally different.

I would keep it simple when talking with the title agent and just ask them if they can close an assigned contract. Using too much investor jargon about flipping can scare title agents.

When you use an out of area title company they still have to use a local title company for the title search and insurance. They will have to find someone in that area who will do assignments, which is pretty much the same as you doing it. Maybe having the request come from another title agent would make a difference in getting it done, but I would definitely start by contacting some other companies yourself.

'96 Chevy Silverado with 250K miles. I originally bought it about 7 years ago to haul my tools and materials when I was doing my own rehabs and maintenance, but now its just my baby. I love my truck.

Will, so you can fund the transaction yourself and then resell it the same day? How is that possible if you have to wait an extra day as you described?

And, Jackie, the title agent I talked to at your title company in Chicago said you could pass the funding through as long as everything was disclosed (i.e. not on short sales).

Understand that let's differentiate a short sale transaction from just a normal wholesale deal here. There has been at least one major legal case that I know of against a short sale investor who was using "simultaneous" closings. There is now an added liability with double closing a short sale for a title company. So I would like to deal with the issue outside of short sales.