All Forum Posts by: Matt Lawhun

Not in the Chicago area, but I know someone in he area who is killing it! He is knocking out 50-70 flips per year right in your area and he only started 6-years ago. Don't listen to the nay Sayers. Join your local REIA and get with people who know the area and know what they are talking about. Good luck.

Where are you looking to buy? My experience from, from a prior enlisted standpoint, is the banks like for you to be at least an E-4 or above before they will consider you. May not be the case any longer... Just check with your bank. Have you considered negotiating a seller financing deal? 20k is a significant down payment for seller financing. I am about to sign the paperwork for 7 rentals that cash flow about $800/mo with only $5k of my own cash. Tenants will pay the mortgage for the next 10years, then I enter into a 3-year 0% seller financing deal. Point is... Use your money wisely. Don't fall into the trap of borrowing from the banks if you don't have to.

Originally posted by @Adam West:

@Chris VonCannon 

 I have several meetings that you can attend as well as tons of great books I could lend to you. Shoot me an email when you'd like to meet up and I'll put you on some books and give you a print out of my calendar for meetings etc. You've probably heard it a millions times, but just in case, the best book to get your mind right is Rich Dad Poor Dad. 

 Rich Dad Poor Dad... all of them are great for getting into the mindset. Don't forget The Millionaire Next Door and The Millionaire Mindset. Both of which are great for understanding how to be thinking like a true millionaire. 

None of the books will teach you "how" to make money in real estate, but they will  certainly help you get your head in the right place.

This looks like the forum for Charlotte investors. I'm a wholesaler, rehabber and landlord just South of Charlotte. I wouldn't mind being colleagues with anyone in the Charlotte Metro area, so drop me a request if you are interested. 

Chris, there are a lot of books and courses out there, so don't get caught up in learning everything you can before you get started. There is not a single book/course out there that is going to replace "action".  Read a book or two, then find someone to emulate. You can continue to read books as you get real life experience. 

Absolutely get into your Metrolina Real Estate Investor's association as soon as you can! When you do get into it, don't just hang out at the main monthly meetings... go to the subgroup meetings too. This is where true relationships are formed. I just found 3 more buyers for my properties I have under contract tonight. These people have known me for awhile, but because I have built a relationship with them over time, they finally came to me and let me know how much they have and that they want to buy from me. Get involved with your REIA... it's better than any book out there. Main meeting is the third Thursday every month. If you are there, I will be glad to introduce you to people...just let me know.

Originally posted by @Lexie M.:

You are definitely fine with the sites you are using. These are just extra sites you can join if you want to...clearly you don't. Spend your time on your current social media sites because they are the most important ones anyway. This can always change, so make sure to keep up on the new trends.

You should look into Google +, high social activity on this platform contributes to how your business ranks on Google. 

REALLY Lexie? I didn't know that activity on Google+ can help your business ranking. I just looked at Google + and rolled my eyes as I thought, "Great, one more thing that is trying to take my attention away from what I should really be doing." 

I think I am going to look into it soon. Thanks Lexie!

As much as I fought it, I am now on the social media networks. I'm on facebook, linkedin and Twitter, but these are ONLY for business connections. It's not that I have a problem with any one of these social networking sites... it's the thought of having my daily life online "voluntarily" and sharing every thought I have, the details of every meal I eat or every event I attend. I tried a personal Facebook page for awhile and I quickly get fed up with the voluminous posts about meaningless details of my "friends" life. Seriously...Is my life so exciting that anyone/everyone really cares what I am doing at every moment?

I have two teenage boys that spend their life on these sites and it is difficult to even have a true conversation with them that involves eye-contact. It's as if they have sold their soul to the social media sites and I swore that I would never be like that! I value my time with family too much to keep my eyes focused on a tiny iPhone screen every time a notification comes through. It's tough enough to stay away from incoming text messages that (in my case) are most likely business related. 

 I've heard about Flickr and I've heard about Tumblr which happen to be the two new social media sites I am researching to possibly add to my business network. So, my question is this... what benefit, if any, could these new sites possibly provide for me to help grow my business? Isn't Twitter, Facebook and LinkedIn enough? I use Dropbox to share any photos of my wholesale deals. Do I really need Flickr? I use the mentioned social media sites, along with Freedomsoft and Mailchip to send out info on my deals to buyers. Is Tumblr really beneficial, or better yet, necessary? If I need to share a video of my projects, won't Youtube suffice?

What benefits do you see in these sites?If you have had success with these, I would love to learn how they have been a benefit to you so I too might be able to emulate your success.

Thanks for viewing... 

Matt Lawhun

Originally posted by @Mark Maire:

Am I missing any steps?
1. Find a motivated seller, with deal potential.
2. Determine ARV and REHAB COSTS at meeting.
e.g. ARV: $150,000 REHAB: $25,000
3. Negotiate a deal.
$150,000 x .7= 105,000 - $25000 = $80,000 - $5000(min. assignment) = $75,000 max offer.
4. Agree at $70,000
5. Seller and wholesaler sign Purchase and Sale Agreement with option to assign.
6. Find cash buyer.
7. Agree on price @ $80,000.
8. Wholesaler and CASH BUYER sign ASSIGNMENT contract.
9. Take contracts to title company, cash buyer wires $80,000 to title company.
10. Home seller signs DEED documents to cash buyer. Home seller receives $70,000.
11. Me, the wholesaler receives $10,000 from title company.

Am I missing something? Do all 3 parties have to be present

 Looks pretty clear to me @Mark Maire, 

All 3 parties do not have to be at closing. I found a property in La Grange, NC (ever heard of it? Me neither until I did this deal... population ~2,500). I found a buyer in Washington State, whom I've never met. Would not know him if he walked in my front door today. Closed the deal in the county where the property exists and I think the seller actually showed up to sign documents. I was at work when it closed and my buyer was still on the other side of the country.

Never met the seller, never met the buyer and they never met each other... how awesome is real estate???!!!

Matt Lawhun 

Originally posted by @Andrew Nelson:

OK, so here is another question on the process...On a deal where we are assigning the contract to the cash buyer. Does the cash buyer cut a check to me the wholesaler for the difference between the price I negotiated with the seller and his contract price? If so, is this always done after closing or is it possible to get a check before. I am a little fuzzy on the final details of the process.

Thanks for the clarification.

 Andrew,

I'm not sure how different is is for each State, but having just closed a wholesale "assignment of contract" deal recently in NC, the process works like this...

I got the property under contract for $15,000. I then found the buyer and assigned my contract (done with and Assignment of Contract contract between us) to the buyer for $3,500. (not much of an assignment fee, but the purchase price was only $15,000...) I then submitted two documents to my closing attorney: 

1. the original contract between myself and the seller for $15,000 

2: The "Assigment of Contract" contract between my buyer and myself. 

Then I waited for a clear title search to come through and a final closing date to be set up between my buyer and my seller. I helped a little in the process, just to ensure things were going smoothly between all parties.

Two weeks later, the HUD was drafted and I received a copy. Just an important side note...You ABSOLUTELY need to have your contract information entered with the closing attorney so that you (or your company) can be listed on the HUD. I don't recommend finding a way around this as the IRS doesn't like back door deals.

On the HUD: Page one will just show (on the buyer's side) how much you (or your company ) will receive... taken from the assignment contract. For instance, my HUD one just simply states, " $3,500 to Manifest Properties, LLC). On page two, it is more specific as to what the funds are for. My page two says, "$3,500 contract assignment fee to Manifest Properties, LLC"

So, the buyer comes to closing with $18,500 ($15k for purchase price of house and $3,500 for my assignment fee) along with whatever his closing costs were.

Once the closing was completed, the Attorney cut my company a live check for $3,500 and I received it in the mail about 2-days later.

Hope this helps Andrew :-)

That is awesome Ronnie! Congratulations to you and your family for reaching that milestone. Keep rockin' it! Next step... "retirement" in your beach home that your tenants paid for. 

Originally posted by @Jeremy T.:

I will play devils advocate here.  

The wholesalers job is to get an accurate assessment of ARV and generate a conservative repair estimate. He/she also has to market for the property, develop leads, negotiate, and close.

With that in mind, if a wholesaler were to bring an investor a property with a fair asking price (70% ARV-conservative repair est.) and they (the buyer) get bent out of shape over an assignment fee? The buyer can pound dirt and find someone else to work with.

Best of luck finding properties.

The rehabber having any ground to suggest the value of the wholesaler in that particular relationship is laughable.  Rehab investors are a dime a dozen...there aren't very many 'average' wholesalers, even.  

IMO, the wholesaler's primary concern should be consideration of the seller.

 I have to agree with you @Jeremy Timko,

The buyer should not care what the wholesaler makes on the deal, as long as the numbers work for the buyer. I wholesale and I use wholesalers... I tell my wholesalers that I don't care what they make. They could make $3,000 or $50,000 as long as my numbers make sense to me. Why should I negate all of the hard work that goes into wholesaling a project? Why should a buyer determine what a wholesaler's numbers should be? There is a lot more that goes on behind the scenes in a wholesale deal than just calling a seller and negotiating. What about all of the bandit sign placing and picking up, the "no" from the sellers, the "almost" deals that fell through at the last minute, the late night and early morning phone calls that interrupt daily life for the wholesalers?  

Listen, I want to make a profit as much as the next guy. However, it is much more important to me to take care and nurture that relationship with my wholesalers. If you take care of your wholesaler and he/she will take care of you. Beat your wholesaler down over the price of the assignment... you may win that negotiation, but you may end up missing out on several deals down the road with that wholesaler. I know I won't send deals to someone who beats me down every time I get a deal for them.

Just food for thought...

Thanks,

Matt