All Forum Posts by: Scott Trench

@Justin Goodin - That's what I thought. Thanks. I wish you the best of luck building your business on another platform. 

@Justin Goodin One question Melanie brought up that I'm confused on is about your ownership of One18 Place, as claimed here: 

https://web.archive.org/web/20240528134524/https://nextlevel...

I unfortunately had to go look this up in the Web Archives, because it appears that your previous site, www.nextlevelequity.com, is no longer active. Did you take down your previous site and rebrand? 

Anyways, as you can see from the page in the web archives, the "Portfolio" tab of Nextlevelequity.com, as of July 2024, presents in such a way that I at least (and I think I am a reasonable person) walked away thinking that you are the underwriter/owner/operator of the asset known as "One18 Place" - described as a 236 unit apartment complex.

Melanie asked you some questions in a forum post (actually, many forum posts) about whether you were the owner of One18 Place, and, in response, instead of saying "Yes, of course - I wouldn't list a property on my website's 'portfolio' tab unless I did, in fact, own and operate it!" you refused to answer her and sent me a private message where you asked me to take down her posts. 

When I DM'd you, asking if you would put my mind at rest by simply confirming you own the asset, your response was, "I don't owe her a response about anything on my website nor do I have to prove anything lol". 

Following this exchange, and after a few more callouts from Melanie, you appear to have downgraded your account on BiggerPockets, and gone inactive coming back only recently to respond to Melanie's post here. 

I do, however, see you regularly posting regularly on LinkedIn, in a similar fashion to your posts last year here on BiggerPockets.

Normally, this would be an issue that I'd move on from and not waste my time on. What do I care if someone owns a property they post to their website or not?

The issue in this case, however, is that you've posted to this forum 1,000+ times, clearly with the intent to raise money. I can only imagine that you've been successful at that. 

I was honestly shocked and horrified when you didn't just say something like "Yeah, Scott, I own the frigging building - I raised the capital, formed the entity, am responsible for operations, and plan to deliver the best investor experience (and great returns) that I am capable of for the investors who I've partnered with." Your response was a first for me in over 10 years here at BiggerPockets! 

I obviously have no way of verifying whether you own the asset or not, but find it odd that you'd throw away years of attempts at building your reputation and leave BiggerPockets rather than simply shut Melanie up by stating that you own the thing. 

Anyways, I'll be following this and the other threads. Perhaps one day, I will come to understand your business model, whether with NextLevelEquity.com, or Goodin Development. I admit that I'm curious.

However, I'm certainly not curious enough to give you any of my money. 

The best thing this community can do is encourage your son to run far away from a subject to deal. The guru your son is learning this technique from is likely not telling your son that the deal will almost certainly encourage your son to get an "off-market" deal from a "wholesaler" who is unlikely to properly disclose the details of the property or encourage an inspection. 

The deal will involve complicated paperwork. 

The deal will leave the seller at your sons mercy for decades (the life of the loan). Your son is responsible for making payments on time or ruining this seller's credit. 

Your son is likely paying more than the property is worth, by definition, as the seller would almost certainly prefer a similar offer that was not subject to. 

AND, your son will be at the mercy of the SELLER and dependent on the SELLER's good choices for the life of the loan. Many Naive subject-to first timers think that as long as they make the payments, life is good. Tell me - someone selling their home to your son, Subject-To - is this a person who has made good life choices? Is this a person who is, from here, going to turn their life around from the desperate situation that they find themselves in right now, such that they are willing to take a Subject-To deal? Are they going to start paying down that credit card debt, turn over a new leaf, and avoid bankruptcy for the next decade? 

Do you want your son to bet the financial outcome of his 20s on this seller's ability to make good choices? Because, WHEN this seller declares bankruptcy, be it 3 years, 5 years, or 7 years down the road, you can bet this note will be called. Your son will be forced to sell or refi, and I bet you that this deal can't handle that situation. 

As others have said, the best thing your son can do is run far from this deal, buckle down, save his pennies (he probably already is doing this), house-hack, and improve a property with sweat, hard work, developing a DIY skillset, and self-managing tenants. 

If he must attempt to get the low interest rates of 2021 on this deal, I suggest that he instead look for assumable loans. These are very different than Subject-To, as the loan actually transfers to your son's name, and off the seller's name. I am not sure, but I imagine that you could also help out and lend your credit to this type of purchase. 

This tool (no affiliation with BiggerPockets) can help your son find properties with assumable loans. 

 I completely agree with this take. While I can see the incoming administration "deporting" (technically) large numbers of people who cross and are immediately sent back to the other side of the border, I believe that the number of people who are deported from this country in the sense that they are ripped from their communities not immediately adjacent to the border and forcibly sent to another country will be less than 100,000 in aggregate over the next four years, and largely limited to violent criminals in red states. 

We have very limited controls, but the advertisers seem to always find new creative ways to get around the rules we impose. 

Wait... the guy who buys all the ads (through Google) on BiggerPockets YouTube videos and attempts to reach BP viewers says that Tax Liens are the best way to build wealth, asking me repeatedly and agressively why I'm not doing it? 

Also, I'd add that any second position debt, preferred equity, or their brother's, sister's or cousins in any shape or form are at #2 on this list, in really any asset class. 

Here's an ideal PM contract: 

The two keys are: The PM is incentivized to make you money, not charge high fees, and is contractually bound to provide reporting that you can understand in a timely manner. 

Basically - I want a PM who keeps the property in good shape and occupied to get paid, and a PM who is either bad at maintaining properties and finding good tenants, or just really unlucky, to not get paid.

- PM charges 8% of rent, which escalates to 10% if the property exceeds 95% occupancy with rent collection. 

- PM charges minimal fees.

- PM is contractually obligated to perform annual maintenance/inspection to keep property in top shape. 

- PM provides a cash based accounting report every month, for every unit under management, that clearly labels all rent, all expenses, including management fees, and the net directly ties to the amount of money deposited into my bank account.

- PM is a licensed handyman, or has them on staff, and takes care of most unit turn work at a reasonable rate. 

- PM has no breakup/termination fee

- PM does not take project management fees, except on large or complicated CapEx projects exceeding $5,000.

I'll settle for a variation of this and give a little, but I simply pass on PMs who hand me a term sheet with 10+ different types of fees. And, the breakup fee is a non-starter. I just won't deal with PMs with a breakup fee at all. 

I don't like your PMs contract because it is basically "If you bother me with anything that is not in this contract, I'm charging you a fee, in the hopes that you will stop bothering me and go away." A good PM, if you are truly annoying them with ticky tack crap, would simply terminate the relationship with YOU, if you were such a bad a client, not charge you $75 every time you call with a question.

The input you are receiving from this wholesaler is garbage. Essentially all legit buyers will get an inspection. I will never buy a property without an inspection. 

I don't know any investors who purchase without an inspection, though I hear about this mythical "no inspector" purchaser from time to time, by way of the rumor mill or pompous listing agent. 

Perhaps this "no inspection" buyer existed 2-3 years ago at the height of the market. But no way is this a thing right now in the vast majority of cases.

@Jay Hinrichs this is what my mind jumps to. I wonder how the wholesalers frame it though?

Is there a reason beyond the "I don't have to actually look out for the seller's best interests" reason that wholesalers think they have?

Can someone explain this to me like I'm 5. 

Is there some reason why the continual crop of new "wholesalers" don't just get their licenses? 

Is there some advantage to not having a license for the wholesaler? 

While I am skeptical of the wholesaling profession's prospects for any but high net worth, large scale real estate operators, I could see the odd agent wholesaling a small handful of deals. But, the inverse - the wholesaler losing out on a bunch of deals that they could probably sell as the agent if they are truly great at finding people who need to sell - seems way more likely. 

What, if any, is the advantage to not getting licensed for a wholesaler?