All Forum Posts by: Ryan Webber

That's a huge question. There are different forum categories for each of those for a reason. Maybe be more specific in your question.

I double closed a HUD on Monday with no cash out of my pocket except for my earnest money. I did have to show proof of financing but I didn't use any financing to do it. It depends on your state and on the title agent.

Outside of that, J Scott is spot on with everything else. Publicly marketed properties obviously have already had some buyers looking at it, and those buyers are not typically interested in buying it from you (most of the time). I had one that I sold to an investor who put in their bid the day after mine was accepted. They were willing to pay more for it, so they bought it from me.

In an real auction format that probably won't happen.

I figured out a way around it. I just don't put an earnest money deposit in the contract, so then I don't have to worry about giving the title company a deposit.

If there's a faster, simpler, and easier way to accomplish the same task, I think the person who insists on doing it the same old way would qualify as the bigger idiot. That seems like real suptidity to me.

Jake Kucheck is absolutely right. The odds are EXTREMELY strong that you over estimated ARV and/or underestimated repair costs. EVERY single new wholesaler/investor I've ever worked with does it. Its the reason why newbie wholesalers get such a bad reputation. Its because they THINK they know what they are doing but the reality is they DON'T. Experience is king in this business.

Out of tens of thousands of offers and hundreds and hundreds of deals, I can only think of 2 houses that a private seller's "asking" price was below my desired offer price. I played the reluctant buyer on both (as outlined by others), but I was definitely not leaving that house without a contract.

Now I have seen banks put REO's on the MLS cheap to create a frenzy, as Will Barnard mentioned, and it works. But I've never seen a homeowner smart enough to work investors like that.

Bill Gulley, you pretty much outlined the MAO formula in your post about how you used to do it in the old days. Its just with doing it hundreds of times, you can begin to estimate the holding costs, resell costs, and desired profit as a general percentage (30% of resell value or ARV).

I used to do exactly what you outlined, Bill, and when I first came across the 70% of ARV minus repairs formula I figured out that the vast majority of the time it matched with my more intensive calculations. BUT it was a whole lot faster and easier to figure.

Now depending on how experienced you are and on different factors of the deal, that 30% discount breaks down something like 10-15% to resell (realtors, holding costs, and closing costs to buy and sell) and 15-20% profit. Obviously you then need to factor repair costs out of the formula too.

Now on higher end properties many times I will factor only resell costs as a percentage and determine a flat figure for profit. I'm normally willing to buy a $200K house for far less than a 20% or $40K profit.

Keep in mind that the 70% formula or its derivatives only works if you are trying to resell to a rehab to retailer. Landlords don't normally use a formula like this to determine if a house is a deal or not. They will use some type of income and/or expense calculation. I always ask my investor buyers what their "magic" formula is. They normally have a formula of their own to determine if a house is a deal or not and I want to know it.

I LOVE boarded up houses, and I LOVE out of town heirs. Both of those are very good signs. Not that I would worry about getting into a house before I talk with the owner or at least one of the heirs. I don't waste my time unless they want to sell. I find that out first and then go break in (with their permission of course), but I have never worried about getting written permission.

I've had the cops called on me by a neighbor once. I wasn't in my We Buy Houses vehicle so I kind of suspected it might happen. Still most drug addicts, homeless people, or kids don't park a nice vehicle in front of an abandoned house in the hood. The cops were relaxed and when I told them why I was there and handed him my business card, they mumbled they figured and left without another word. Outside of that one time I've had no problems with going into HUNDREDS and HUNDREDS of vacant houses. Most cops are not going to assume its a B&E if you have a vehicle out front with a We Buy Houses sign on it. I don't suspect they would be busting in doors with guns drawn on that one. For all they know, its your house and the neighbor is crazy and doesn't know the house sold. Its kind of self explanatory if you have advertizing on your vehicle, and I wouldn't even worry about a neighbor calling the cops if my vehicle is outside with my sign on it.

Antonio Bodley, you don't have time to deal with heirs? What the hell do you have time for then? This business is work, and money doesn't fall out of the sky into your lap (most of the time). The big profits come from the hardest deals, just as K. Marie Poe shared. If you are in this business because you think it will be easy, you should quit now. Really and truly, get out. You won't make it. It takes a tremendous amount of focus and time over the course of years to build a successful operation. And a "make it happen" attitude is paramount to success. You will never succeed in this business, or any business for that matter, without it.

How are you going to be a wholesaler without time to go after the good deals? I hope you have a ton of money for marketing because if you can't aggressively and proactively go after the hard deals the only other option is to spend the BIG bucks to get them to come to you. Wholesalers only value is deals and deals come from either dumping money into marketing or spending time and energy aggressively tracking them down. And many of the deals that come to you through marketing (at least half of my deals have title issues) will have heirs spread out all over the country. So get a good title agent and go to work!

Joseph Ball, you are cautious about buying a $95 course or buying REO's? If you are trying to learn something in this business $95 is well worth even the smallest nugget you might pick up from the course. It may be junk but $95 is a good risk versus reward in my book. At the same time, I'd spend a couple hours surfing the REO's section here on BP. I would guess that you will receive far more information right here for free than in that course.

If your caution is with buying REO's, why? A deal is a deal. I don't care much where I get them from as long as they hit my numbers.

In my region, the IRS will only redeem their rights if they have a guaranteed bidder who has put 10% of the redemption amount or at least $10,000 upfront to the IRS. If they get a guaranteed bidder with 10%, they will then do a public auction. I was very tempted to do it on one house but I knew that when it went to public auction, I would lose.

As for clear title, the title companies I work with won't touch foreclosures with IRS liens until after the 120 days and showing that proper notification was given by the foreclosing entity (in Texas, the trustee) before the sale. If proper notification was not given to the IRS BEFORE the sale, the IRS lien transfers with the property indefinitely, even AFTER 120 days.

I would clarify that just because you are out of the picture legally, you should very much stay in the picture in reference to the title work and closing.

At this point, you become a very well paid babysitter. Its your paycheck, make sure it closes and everything goes smoothly for your buyer and seller.

I use a 1 pager, and I have for years. My assignment contract is like half a page.

This is definitely NOT the million dollar question. Its more like a $100 question or maybe a $500 question depending on how expensive your attorney is.

Its not a "supposed to" question, either. Its whatever you prefer. I prefer a 1 page contract because its simple to read, understand, and sign. When a seller doesn't understand the contract, they don't want to sign it. I want them to understand it and feel comfortable signing it without wanting to talk to an attorney or to an uncle. My 1 page contract does that. It does not cover all the bases, obviously, but it does cover all the important ones.

Some people prefer the 6-10 page real estate commission issued contracts because its more official and addresses every possible thing that might ever happen.

There is a wholesaler here on BP who doesn't even use contracts. He just sends out escrow instructions.

Figure out what works for you and do it. The real million dollar question is how are you going to find a hundred deals to use that contract on?