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All Forum Posts by: Shane H.
Shane H. has started 10 posts and replied 410 times.
Post: Valuing Billboard Easement
- Posts 433
- Votes 208
Quote from @Ethan Anderson:
Thanks for all the answers! For clarity, the offer is for a lump sum payment of tens of thousands of dollars for a perpetual easement. No monthly checks.
You value it based on yearly income and cap rate. So you have to determine it’s lease value. Land lease value. Not run the business by advertising yourself value. That’s much more difficult.
Post: Valuing Billboard Easement
- Posts 433
- Votes 208
The last reply seems like a lot of work. I would simply contact a sign company and see what they would lease the land for. Apples to apples. You building and handling the rental, hanging signs, etc is an orange. This way you can decide if you’d prefer to lease the land or grant permanent easement. You can also counter this person with a lease instead of an easement.
Quote from @Account Closed:
Quote from @Shane H.:
You either didn't read and comprehend what I wrote, or you deliberately put in my mouth things I didn't say. I equated a car owner to what you insist is invariably an "elderly individual" or a "widow" (as far as I know car owners come in different ages, genders, marital statuses, mental capacities and etc.). Car dealer, in that equation, is a prototype for a wholesaler in a RE transaction, not a seller of home. We are comparing RE wholesale transaction to trading-in a vehicle to a dealer for a wholesale value.
Quote from @Account Closed:
Quote from @Shane H.:
Quote from @Account Closed:
REA and Brokers will always dislike wholesalers, that's just the nature of business where EVERYONE is driven and motivated by selfish interests and greed and nothing but selfish interests (all "moral" talk is a smokescreen, for naive to fall). Anyone who aspires to be a wholesaler and reads this forum, grow a thick skin. Business is like a high school and most people in real world are emotionally driven and irrational. Don't expect to be liked and don't try to be liked. No one will roll red carpet for you except the ones who can benefit from your business and services. Just do your thing, know what you are doing, don't lie, don't misrepresent, don't break the law.
I completely understand why you would convince yourself that all business is immoral in order to justify doing immoral things yourself. It is 100% possible to operate business in a moral manner. Of course different folks have different views of what is moral, but literally everyone here who has dealt with wholesalers has noticed their propensity to seek out elderly sellers. The legal bar for a criminal transaction or claiming the person was unable to enter into a contract are not necessarily equivalent to the bar for those who need guidance I.e. the elderly. Your obsessive focus on the buyer and their business acumen is strange… unless… it’s a distraction from the individuals who actually need the protection. The often less capable sellers.
Early on in this discussion I thought you were just a wide eyed fellow taken in by the ability to enter into a market with little investment. At this point I suspect a more nefarious reason for your defensiveness of this group of people. While some have different morals than others most reasonable people agree that certain groups need protection. That’s why we write criminal laws, and why many of us are advocating to expand slightly in this area, what is to be considered criminal.
By requiring licensing that you think is so onerous, which is usually quite easy to complete and reasonably priced maybe $1,000 and somewhere between a day and 2 weeks of online classes, we can protect a segment of people that need protection. Repeatedly you’ve gone back to say brokers would likely inflate the price because if commission. That would literally be beneficial to the segment that needs to be protected so that’s a horrible argument investors hardly need protection at the same level that little old widows need. Now somehow youve equated auto dealers and professional car salesman with those elderly individuals the rest of us would like to protect. Everyone reading can see how absurd that is. I suspect you can as well.
You’ve actually inspired me to write to my legislator to encourage a stronger protection of those individuals from wholesalers, even if that means banning the practice entirely.
You can suspect and think all you want. First question is: what is your definition of "moral" versus "immoral" wholesale transaction? Please be concrete and elaborate. I understand you mean "moral" is something beyond "legal", but what exactly you mean when you say that?
Second, there are numbers involved here. Let's say there is a property on 123 Main Street, Anytown, Maryland. It has 3 br and 2 ba. I call my REA, we run comps and find that similar homes that were sold in that area in the past 6 months fetched $100,000.00 each. I call my HML guy and he says the area is good, property looks good and that they would lend hard money to an investor willing to buy , repair and flip it.
If I am an investor who wants to buy the investment property, I will want to buy this property for (let's say) 70% of ARV minus my repair costs, provided it's in an area where there is steady demand for homes. Let's suppose all those homes we found in MLS to run comps that were sold for $100K were in good enough shape to meet the definition of ARV. Suppose I brought in a contractor and I know that it will cost investor $30K to repair this particular home to make it retail ready. Now I know that I could offer this home AS IS to an investor for $40K. That's just how much investor/rehabber will pay to acquire it, or else they won't get a return on investment to justify their risks and costs. So, $40K is how much it's worth in a wholesale market. Suppose I have spent 2 months to find a seller of this property, I have spent hundreds of dollars on Facebook ads, spent $1300 to a company that placed 2000 cold calls in the US, spent another couple of thousands on direct mailing campaign. I am not counting MY time and effort, driving for dollars and paying for my gas and wear and tear on my car. As you can see, I have already spent at least $4K to find that seller (he didn't just come and nock on my door out of the blue). So, it's only natural that I add my finders fee to it, to make it worthwhile to do this (I am not an idiot nor a charitable , non profit organization that receives government grants and tax deductions, after all. I run a for profit business and I either have to profit or quit). So, I add my fee to a assignment contract, let's say $8,000. And I deduct those $8K from $40K. So, realistically $32K is my MAO, that's all I can offer the seller to make this work worthwhile of doing. I offer $30K to seller, we haggle and he agrees to give it up for $31K. I am not adding closing costs there, to make math simple, but you get the drill. So now tell me, is it "immoral" to offer $31K to a seller? Is it immoral to have a contract with that figure with a seller and to collect assignment fee in the amount of $8K? Let's talk real numbers here, not pontificate like if we were priests in a Sunday school. So, what wholesaler is supposed to do to be "moral" in your books? May be pay $60K out of his pocket, to get seller $100K, to make seller happy? Is that what you propose here? I am just curious what your rationale is on this. I am not interested in your "moral" lessons, but I want to understand how you think wholesaler should operate in this particular case as described? Please be specific.
P.S. Please feel free to write to anyone you wish. I can do the same! LOL
I’ve given examples repeatedly of what would be immoral. So have others. One last time.
lying about what you’re doing.
manipulating numbers. I literally gave numbers in another comment of what I actually saw happen. But to use your example. If you had to narrow or expand criteria to come up with the 100k comps. In the case I sat in on, the individual uses straight up 3/2 comps even though this property had another 2,5000 square feet of home to include a bar, dance floor, and 3 “bonus rooms, as a bi-level they didn’t have egress to be considered bedrooms. He includes the price of adding a bath to the half to make it 3 bath. Yet comped to 2 bath. He then narrowed it to the tiniest neighborhood ever requiring to go back 18 months in a quickly rising market. My agent didnt do any of that and comped 150k higher on arv.
This was not simply a slight difference. These were manipulated comps. To the tune of 40%. So if your comps as honestly run were 140 and you manipulated them to get to 100… as for your criminal standard this would be very difficult to prove as a criminal act. Nonetheless, it’s clearly manipulative. Clearly not an honest practice.
Telling them it’s worth 140k and you want to make 30k and the buyer of which you are not, wants to make 30k and it needs 30k so you can give them 50 is an honest practice. Telling them it’s worth 100 when you know it’s worth 140 is not. It’s quite simple really.
I gave an analogy of an act in another business, the hvac contractor. Do you disagree that telling them it’s going to explode to sell a unit when it shut off because of a simple issue is okay?
Quote from @Account Closed:
REA and Brokers will always dislike wholesalers, that's just the nature of business where EVERYONE is driven and motivated by selfish interests and greed and nothing but selfish interests (all "moral" talk is a smokescreen, for naive to fall). Anyone who aspires to be a wholesaler and reads this forum, grow a thick skin. Business is like a high school and most people in real world are emotionally driven and irrational. Don't expect to be liked and don't try to be liked. No one will roll red carpet for you except the ones who can benefit from your business and services. Just do your thing, know what you are doing, don't lie, don't misrepresent, don't break the law.
I completely understand why you would convince yourself that all business is immoral in order to justify doing immoral things yourself. It is 100% possible to operate business in a moral manner. Of course different folks have different views of what is moral, but literally everyone here who has dealt with wholesalers has noticed their propensity to seek out elderly sellers. The legal bar for a criminal transaction or claiming the person was unable to enter into a contract are not necessarily equivalent to the bar for those who need guidance I.e. the elderly. Your obsessive focus on the buyer and their business acumen is strange… unless… it’s a distraction from the individuals who actually need the protection. The often less capable sellers.
Early on in this discussion I thought you were just a wide eyed fellow taken in by the ability to enter into a market with little investment. At this point I suspect a more nefarious reason for your defensiveness of this group of people. While some have different morals than others most reasonable people agree that certain groups need protection. That’s why we write criminal laws, and why many of us are advocating to expand slightly in this area, what is to be considered criminal.
By requiring licensing that you think is so onerous, which is usually quite easy to complete and reasonably priced maybe $1,000 and somewhere between a day and 2 weeks of online classes, we can protect a segment of people that need protection. Repeatedly you’ve gone back to say brokers would likely inflate the price because if commission. That would literally be beneficial to the segment that needs to be protected so that’s a horrible argument investors hardly need protection at the same level that little old widows need. Now somehow youve equated auto dealers and professional car salesman with those elderly individuals the rest of us would like to protect. Everyone reading can see how absurd that is. I suspect you can as well.
You’ve actually inspired me to write to my legislator to encourage a stronger protection of those individuals from wholesalers, even if that means banning the practice entirely.
Quote from @Account Closed:
Quote from @Jack Seiden:
I am fine with being hated. Moreover, I think it's one of the best motivators to action. I would get depressed if I became popular and liked by all, like some high school cheerleader or baseball player. I don't have an innate need to be liked. So, I look forward to doing it, with love of doing what I am doing.
But I have to address couple of things you mentioned. First, a lot of people exploit old people (some registered nurses, members of heavily regulated profession, with multiple degrees and licenses in nursing and medical sciences come to mind. There are instances where care-in nurses stole the funds and property of elderly they were hired to look after). Guess what? You can't get far doing it. Even if an old, senile person screams off the top of his lungs that he wished to sell you his property, State or his relatives can come after you, void the contract he signed and take that property from you. You could be criminally charged for taking advantage of mental disability of the senile old person. So, while there will always be people (nurses, brokers, realtors, wholesalers and etc.) who will take advantage of elderly people, it's not an argument or excuse to outlaw the entire industry. Just enforce the laws on the books and go after people who engage in nefarious practices.
Next, what is so "bad" in it for society and how is it worse than any other business? Are licensed dealers who pay trade-in values and "take advantage" of car owners any better? May be we should equate them to meth dealers now? And how about current Boeing CEO, a culprit in death of hundreds of Americans? Where is the outrage of our upstanding society when most powerful, on top of the food chain, engage in crimes that result in death of hundreds of Americans? Aren't we being hypocritical here?
people are not hating you. You’re not the star of this show no matter how much you’d like to be. People dislike what they’ve seen run rampant in an industry.
what are these insane regulations and licensing requirements you’re referring to to become an agent. In most states with no criminal background you can do it in an afternoon. Lol
Quote from @Account Closed:
Quote from @Jack Seiden:
Quote from @Account Closed:
Quote from @Jay Hinrichs:
finally a decent question from you. The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.
Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.
You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))
As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol
And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD.
Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol
I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.
@Jack Seiden - You conveniently ignore the fact that I am not the one arguing, rather defending a position based on my views as a wholesaler, while wholesalers as a group are relentlessly being attacked on this forum.
@Jay Hinrichs - which I don't mind, btw. The only way to learn and understand the process is to consider all angles and views on it. It would be a terrible forum if it sounded like an echo chamber.
I love how you even argued about arguing. Lol
no one’s attacking you. You’re not a wholesaler. You’re an aspiring wholesaler. People who have dealt with them are trying to tell you a tale of caution. Rather than taking that and turning it useful by finding ways to avoid being that snake oil salesman who preys on the weak and elderly, you’ve decided that all of the people who have seen the misdeeds are just jealous. I suppose in a way you’re right. Sometimes I wish I had no morals so I could screw people over without empathy or regret. Unfortunately I was dealt a conscience. I was in your shoes. I took the cautionary advice, researched it from an unaided perspective rather than the one you’re approaching it from. A deal fell in my lap. I brought an experienced and successful wholesaler in. I was appalled by his tactics. No you didn’t “earn” that money if you convince an unsuspecting widow that her home is worth 25% of what it’s worth by inflating repair prices, deflating comps, and pretending to be a cash buyer that you’re not. That makes you a con man. If your hvac contractor tries to sell you a new furnace by telling you it’s more efficient and over one you may save money via energy savings, less repairs, etc that’s fair. If he tells you your furnace is going to explode when it’s not, just to make a sale he’s a thief. Why should that homeowner benefit from the years of experience this contractor has? He has every right to use his superior knowledge to rip them off by scaring them into taking a heloc to pay for a new furnace because it needs a filter replaced.
Quote from @Jack Seiden:
Quote from @Account Closed:
Quote from @Jack Seiden:
Quote from @Account Closed:
Quote from @Jay Hinrichs:
finally a decent question from you. The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.
Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.
You are always being so condescending, saying I am naive, lacking in rudimentary knowledge or surprising you by asking half decent question. Which is ok by me, I don't get offended by this stuff. But what I understand from what you wrote above is that Broker or Buyers agent's commission (money they earn from transaction) depends on the selling price of the property, so the higher it is the merrier REA or Broker will be. As a wholesaler I have no such concerns. I don't have to overinflate the worth and tell tall tales to seller, so I can grab the most commission out of peddling his property to unsuspecting , foolish buyers. I look at it from investor's point of view and try to get it at the least price possible. Obviously, wholesaler and sellers potential agent/broker have a conflict of interest there, which leads to seller's REA or Broker to super inflate the worth of seller's junk and fool the potential buyers, by lying to all about high value of uninhabitable garbage)))
As to 95% of REA and brokers not reaching the sellers before wholesalers, whose fault is that? lol
And, as wholesaler not having a fiduciary duty to seller, not running a charitable organization or Church, how is it my job to educate the seller about the worth of their property? Unless that seller is in pre-foreclosure and 60 days past on payments, why is it any of my business to teach and educate a seller? Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD.
Come to think of it, about education. I had to make choices and forego things I could do: like going out to party with girls, drink 7 days a week, smoke weed, drop school and never open a single page of any meaningful book, leave alone educating myself on wholesaling RE, while I was going to school, constantly reading books and learning new things. A clueless ADULT seller with all his cognitive abilities INTACT also made certain choices that were most pleasant to him at the moment and now pays the due price by being stupid. Why is he now entitled to fruits of my labor, my knowledge and education? I see so many strange assumptions about non-existent fiduciary duties of wholesalers, I really wonder where do you get these ideas from? lol
I think you should at least consider going out and partying with girls and drinking 7 days a week, would at least be a better use of your time, than arguing with random people on a message board for over a week.
@Jack Seiden - You conveniently ignore the fact that I am not the one arguing, rather defending a position based on my views as a wholesaler, while wholesalers as a group are relentlessly being attacked on this forum.
@Jay Hinrichs - which I don't mind, btw. The only way to learn and understand the process is to consider all angles and views on it. It would be a terrible forum if it sounded like an echo chamber.
Quote from @Jay Hinrichs:
Quote from @Account Closed:
Quote from @Jay Hinrichs:
Quote from @Account Closed:
Quote from @Shane H.:
Quote from @Account Closed:
Quote from @Shane H.:
Quote from @Account Closed:
Quote from @Shane H.:
Quote from @Account Closed:
There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.
I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.
Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.
POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.
I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it.
I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed.
Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated.
No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit.
Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?
once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.
Great. So, why on earth sellers don't reach out to REA to get the transaction done? Or, better yet, why REAs don't do their legwork to find those sellers, put the property on MLS and sell to investors? Is wholesaler stopping sellers or REAs from doing what they otherwise would do?
finally a decent question from you. The reason is 95% of sellers that wholesalers work with are approached by wholesalers first .. They have not had time to search our consult with an agent.
Brokers do solicit these types of homes for listings.. I get mailers from James Wises Holton Wise company every week on my inventory in Cleveland and he is a Broker. Part of the reason they go with wholesalers is simply the wholesalers do not tell the truth.. the truth about what the house is really worth and they like to talk about how there is no fee.. Keep in mind many of these sellers simply dont know what they dont know.. they take the wholesalers word for it. And end up leave thousands on the table.. The sellers believe the wholesalers value number and they fall for the no commission line.. not knowing that at the end of the he day that free commish cost them huge dollars if sold through MLS.. its a game and a game that is played well by wholesalers.. At the expense of the property owner. Just ask how many BP investors get solicited from Wholesalers frequently and how they just laugh at them when the number is given.
Perfect example I have a prop in Cleveland that I put up for sale for fun I called a few of the letters we buy houses.. best offer I could finally get out of them was 40k.. I listed it (89K) and in one week had 6 written offers from 45k ( probably a wholesaler ) to 85 to 91k with an escalation clause .. I took what I thought was the best offer at 91k that had NO inspections close in 3 weeks and had a POF which was a copy of a bank statement in the name of the buyer.. Its a nice duplex that makes 1300 a month gross.. But its in East Cleveland So if it was west cleveland it would have been quite a bit higher priced.
I brought a deal to a wholesaler who ran the local reic. Offered to split it with him if he’d teach me. He taught me alright. We offered 60k for a 300k arv house. Probably could have gotten 225k as is. He spent half an hour trying to convince her that was it’s value. Provided nonsense comps in the 200 range as arv. Claimed it needed 100k of work. It was outdated but move in ready otherwise. Nothing dilapidated by any stretch of the imagination. I was mortified I brought him in. Thankfully the widow had a 125k mortgage and simply couldn’t accept. She sold it off market for 180 a few weeks later. I had run my own comps before we sat down with her and couldn’t believe the bs he was feeding her. I was too embarrassed to reapproach with a real offer after.
Quote from @Jay Hinrichs:
Quote from @Account Closed:
Quote from @Jay Hinrichs:
Quote from @Shane H.:
Quote from @Account Closed:
There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.
I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.
and its a fake POF if you read it.. total BS and a stain on the industry.. absolute Fruad..
If that guy who runs https://besttransactionfunding.com/ is an absolute fraud as you stated, then why he is still around since 2009 and not in jail? )))
Surely one can't be openly running such a massive fraud operation for 15 years and still walk free (unless one is a CEO at Boeing, of course)?
Eric again your just naive .. its not the person who provides the the letter to wholesalers its the person who uses it knowing full well they have no loan or funds set up .. its just a fraudulent act on their part.. its call fraudulent inducement to contract.. without it seller would never contract with the buyer ..