All Forum Posts by: Sean Cole

An agent being involved doesn't change the assignability of a contract in Ohio, though for some reason it may be different where you are.  If you're buying from an individual, it's unlikely that their contract prohibits an assignment, as this is generally only seen in Bank contracts.  READ THE CONTRACT!!

A double closing on a deal this small is probably actually a great way for you to get your feet wet with a transaction lender (friend/family) without it being a huge dollar amount.

@Jassem A. that's exactly the point!

Good luck with your offer.

@Jeremy Pace you're either intentionally or unintentionally not understanding escalator clauses.  They're used in multiple offer situations exclusively, so there's never a situation that occurs like you're presenting.

I've bought houses for $10s of thousands less than I was willing to pay by using these effectively.  If you'd rather not use them, it's your prerogative.  I choose to make more money by using all of the tools that I can instead of paying the most that I'm willing to pay when I don't need to.

@Jeremy Pace I'm not sure if laws are different in Ohio and Pennsylvania, but there's nothing here in Ohio that would require the seller's agent to present Y as your offer in this situation.  In fact, the terms "highest" and "best" don't always equal the same thing.  I've bought numerous houses with a lower offer but better terms than other investors who can't think creatively and believe that the most dollars always wins.

@Jassem A. these offers are legitimate, though most banks use systems that don't allow their agents to enter this type of offer.  As a result, it's an agent by agent and broker by broker situation here in Cincinnati.  Some agents/brokers will accept these types of offers and then wait to put your offer in until all of the other offers are received (so that they can do the $1,000 over).  Most agents/brokers won't do this, however.

You also need to account for what you want to make on the deal...

After Repair Value * (1 - ROI) - your markup - repairs

ROI is what you want the investor to make (really, what they expect to make).  That may be 30%, 25%, etc.  It's not city-wide here in Cincinnati.  Other factors include the age of the house, the specific suburb, the amount and type of repairs needed, etc.

Have you wholesaled any houses yet?  Rehabbed any?

The 1 piece of advice that nobody seems to get, or if they get it they ignore it, is to "stay in your lane."  Do 1 thing better than anyone else and don't try to do anything else.

I'd reach out to an appraiser rather than relying on a realtor (this is coming from a realtor) because too many don't have a clue...

An appraiser has the training to actually determine the value-add from any specific feature of a house, where most real estate agents go off of feel.  Beyond that, pools in Cincinnati (where I am) are much more subdivision dependent than city-wide.  Some aerial photographs will show pools in almost every yard and others can't be found.

I think you're putting the cart before the horse here, unfortunately.  There's no need to think about scaling a wholesaling business before you've even proven that you can wholesale!

Look, I have 1 other person that works with me and we've got 27 deals closed/pending this calendar year totaling over $250k in margin.  Think about that for a second.  Compare that with what my other post said about my retention of that margin.  I've been in this business full time for 4 years and have 1 other person working with me and we've done that.  In 3 months.  

We may expand our territory North into Middletown, Springboro and Dayton suburbs.  We may go across the river into KY.  Eventually.  When I was younger, I had an ego need to someday run a huge business employing dozens or hundreds of people.  Know what I realized, and what I think most realize at some point?  It's a hassle and you work a lot harder to make the same or less money when you obsess over you ego need for a big office building with a bunch of employees to tell you how great you are.  Me?  My ego says that I need to have more money in the bank than most any of the Sr. Executives at any of the Fortune 500 companies here in town.

Sorry if this comes across as bragging.  I'm just trying to prove the point that scaling a wholesaling business is a dumb goal.  Really dumb.  Know what it cost me to start my wholesaling business?  About $25k between legal fees and software/startup costs.  Maybe that sounds like a lot of money, but anybody working for your wholesaling business (if you guys are actually making an money) will easily have that saved and can compete against you in a heartbeat.

Stop worrying about scaling a non-existent business and get out a wholesale 1 deal.  Then 2.  Then 2 a month.  Then 5 a month.  When you're consistently doing 80 deals a year, go hire an admin.

I forgot the biggest point I meant to make:  Net Listings!

A Net Listing, if you don't know, is when a seller tells the agent, "Look, I want $100,000 for my house.  Anything you can sell it for above that is yours to keep."  So you go out and find a buyer for $110,000 and the seller gets their check for $100,000 at closing and you get your $10,000 difference.

Sure sounds like wholesaling to me!

@Chris Soignier, I think you're referring to an Appraisal.  If REALTORS are supposed to provide valuations, BPOs wouldn't exist.

• Standard of Practice 1-3

REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value.

• Standard of Practice 1-14

Fees for preparing appraisals or other valuations shall not be contingent upon the amount of the appraisal or valuation. (Adopted 1/02)

Most of Article 11 relates to Valuations/Appraisals.  In addition, given our duty of honesty, how can you get around offering less than it's "worth" if the seller asks you what it's worth?