All Forum Posts by: Ryan Webber

Welcome toprealtor.

Hello Jo and Jo's sister. Welcome to the forum.

Welcome, Dede. You've definitely come to the right place to network.

You said you were in real estate for many years, was that as an agent?

I do quite a bit of wholesaling (mostly double closes but some assignments) in Texas and the seller has never had to sign the assignment. It may be because my title company doesn't require it, but the seller will still see the fee on the buyer's side of the HUD1.

Now the sellers contract will state so and so and/or assigns as the buyer, so they may get discouraged by this. At that point you would reassure them that you may assign the contract but either way it won't affect them getting their money.

I personally don't use the TREC contracts unless I am working with a realtor, just because they are extremely lengthy and can be intimidating to a stressed out, strung out seller of distressed property. I use a simple one page contract that the seller can read and understand in less than five minutes. I want to be able to meet a seller at a property, figure ARV, repairs, and my offer, make my offer, and drive off with a signed contract. An eight page contract will induce people to want to look it over or the dreaded, talk to an attorney. By the time they actually do look it over or get it back from an attorney, 5 other investors have probably made an offer on it. And most likely, if you have properly figured your numbers, the other offers will be more than yours because you would've wholesaled it to one of those other investors for $5,000 more than you bought it for.

I'm not sure what a Non-Disclosure, Non-Compete and Master Fee Agreement is or what it is going to do for you, but the only additional contract you will need other than a purchase contract is an assignment contract.

If I were to use a TREC contract and I wanted an out, I would either utilitize the option period (you will have to pay atleast $1 for it), or I would utilitize the financing contingency. You could also put your own contingency into the special provisions.

If you are going to utilize the financing contingency then there is a space on TREC's Third Pary Financing Addendum for how long the contingency is open for. According to the addendum, though, you will have to give written notice to the seller for it to release you of recourse from the seller. This is also true for the option period for termination of contract.

I personally do not ever put earnest money down with a contract unless a realtor is involved. It is not necessary and only complicates things. I, again, use only a one page purchase contract for when I purchase and a slightly altered one page purchase contract when I am selling. If I am doing an assignment I also have a one page assignment of contract. None of my contracts have any contingencies, but if I am buying I have the experience and resources to buy the property even if I don't flip it by closing, and if I am selling there is no way the buyer is getting out without atleast losing their $1,000 minimum earnest money.

I would highly recommend networking with a realtor for comps and for doing deals through the MLS and for HUD REO's.

I've seen some partnerships with a 50-50 split, but it was usually one partner with the money and who was finding the deals and taking care of all the paperwork, and the other partner doing all the labor of remodeling. Expenses of materials and carrying costs were repaid and then profits were split.

I do business with several investors that will use hard money for the initial purchase and then quickly refinance with conventional financing. The restriction at that point is if the lender has a seasoning requirement for refi's, which some do but many do not.

$5,000 now with no headaches and hassles, or $10,000-$20,000 in 6-12 months with a ton of headaches and hassles? Hmmmm.

I have one full time crew that rehabs so I can't bash it too much but I definitely prefer wholesaling anything I have.

First off, I can't efficiently rehab all the houses I come across. Originally I was planning on having three full time crews to rehab, but it became an efficiency nightmare. Good help was scarce, and good contractors were non-existent for a reasonable price. I found myself hovering around my rehab projects and not finding more deals.

Second, if I were to rehab 5 or 6 houses at once and then wait for them to sell while I am fixing others up, I would be looking at having $100K-$200K in cash out at anytime. Not only does that not let me get a good night's sleep :shock:, but that will be really bad when my local market slows down. :cry:

Third, I wouldn't want half the houses I buy if I didn't resell them to someone else. I buy in certain areas just because I know I can flip it to certain investors that like rentals or owc's in that area. If I wasn't wholesaling, I would just be passing up those deals.

And the main reason I wholesale is . . . I HATE retail buyers.:protest: They want this fixed, and that replaced, and the inspection said that was wrong, and the appraisal is going to take 2 weeks, and the closing is going to take 30-45 days, and blah, blah, blah.

With an investor its as-is, where-is, how-is with less than two weeks to close with $1000 upfront, no refundable. I love it.:woohoo:

I got a contract on a house on Wednesday with a closing scheduled on that Friday, I made two phone calls to investors, told them they couldn't see the inside, and ended up double closing on Friday with a check for $5,000. The investor took months and probably $15,000 to fix it up, listed it with a realtor, waited months and finally sold it and made $15,000. In the meantime I bought and sold 50 other houses.

I spend my time, effort, and energy focused on finding deals. That's my speciality, and that allows me to be extremely efficient at it. I offer deals that rehabbers can't beat in months of looking, because it is all I do.

For beginners, I am partial to advise wholesaling. I personally do wholesaling, and I think it gives the lowest risk for the highest return. Rehabs (fix up and resell) requires a good working knowledge of multiple factors, and in my opinion should be left to more experienced investors. The only issue with rental property is that normally it requires a large amount of capital to get started (downpayments, repairs, mortgage payments) and good credit. So unless you have both of those it may prove to be difficult to get started.

Properly structured, wholesaling can entail the lowest risk with the highest return that I have seen in real estate. The key to limiting your risk is to not buy anything.

I'm serious, don't buy anything. Atleast not until you have stabilized yourself financially. What I mean is to make sure that you have a contigency out in any contract you negotiate, and if you can't wholesale it, walk. If you can't sell a property in 30-45 days then either you bought it wrong or you aren't marketing it to enough investors.

I would also highly recommend you join your local REI club. Its the best source for local contacts and knowledge.