All Forum Posts by: CK Hwang

If you are trying to find a $1m property and want to be able to sell relatively quick, I would suggest coastal southern california. You would be operating in the bread and butter range of real estate here, so if you are trying to do a flip, you don't have to worry about targeting a very narrow market on the sell side. 

Hey Lisa, are you current on all your payment? if you are already in default or going to default, one of the things you could try is calling up the credit card company and seeing if they are willing to negotiate the terms of your debt. Likewise for student debt. I'm not sure about car loan, but perhaps that is a possibility too. 

Or, i would get a credit card that has 0% APR for the first year and transfer my existing debt to it. then i would do my best to pay off the credit card debt as fast as possible.

I would say flipping houses is probably one of the most capital intensive sectors of RE investing. Now you could go raise money from investors, borrow from lenders etc, but fundamentally, flipping is capital intensive. 

If you don't want to to raise capital, then I'd look towards getting a real estate license and being a realtor and starting there. 

Thanks everyone for reading my rant. Lakeem Allen, don't get me wrong, I am not negative towards wholesalers and am happy to buy from them. It's just that it doesn't seem to be a standard in which the way deals are handled that I think makes that part of the industry a mess and making it hard to do business in this sector.

Perhaps a lot of this nonsense is coming from "gurus" who are teaching underhanded ways to make money from real estate? 

For example, I had a recent deal brought to me by a wholesaler. While the deal in of itself is ok, he was so "bendy" with the details of the deal, that i was hesitant to even act on it because who knows what else he is bendy on. i.e., first deal he brings is a daisy chained deal i had received a few days ago, but he had marked it up anther 40K. Second deal, wholesaler claims to be an off market, and it is clearly listed on zillow and truly with a MLS number attached to the property.

Sometimes, I think it might be a good idea to come together as a community and award gold stars to trusted wholesalers to clean up int he industry a little. And to be a goldstar wholesaler, they need to 

1. not daisy chain deals

2. only sell deals they have under contract in their own name and have an actual deposit on

3. clearly represent the extent of damage to the house 

and whatever other criteria necessary to certify a truly legit wholesaler. 

Just some thoughts on what perhaps could be done to make the industry more legit. 

John, if you are going to rent it out, does it makes sense to rehab it so nicely? My main concern with your strategy is that if you rent it out, and it gets trashed, you gotta throw more money at it (which I think you will have to after renting it out even if it isn't trashed) when you want to sell it in a year's time, but you will be back at square one. 

Hi Lakeem, I think gaining credibility is a tough game for anyone at any age, but here is my advice based on trying to gain credibility to raise funds for myself

1. have a nice, clean professional website and a email address that goes to your domain name and not some gmail address, put up past project on the site so people will know you've done projects

1b. A business Facebook page in addition to the site is a good idea too. 

2. have a nice clean business card

3. I find having a LLC does give credibility, as does filing taxes legitimately, registering with your city etc etc

4. surround yourself with credible CPAs, attorneys, escrow companies, title companies, so even if the seller doubts you, your team around you can vouch for you and instill confidence in the seller

5. Drive a clean well maintained car, not too cheap, not too expensive (trust me, you're not going to get a deal showing up at someone's door driving a porsche, but no one is going to believe you have the money if you show up with a beat up old skoda either)

6. put together a prospectus for your investors and sellers. Have it printed on nice glossy card stock using a company like vista print. 

7. be patient and give it time. Trust in a business takes years to build. When I first started, no one took me seriously, after a few years, I can now sense that it's changing because people are now calling me to do deals rather than me begging to do deals. 

Hope this helps. 

So, I am guessing a class on real estate wholesaling class must have recently let out or something because I have just been inundated with wholesalers bringing me deals this week. But here is what has been driving me crazy about the deals that they have been bringing to me. 

1. All of them are daisy chaining an existing property being wholesaled and marking it up like crazy. For example, there was one property being sold by New Western and all these wholesalers are marking up the property 30-50k and trying to sell it to me, and they give me the same over estimated ARV on the property that came in the original flyer and claiming that is is under contract, just not disclosing that it is New Western that has it under contract and not them.

2. They just grab a property off the MLS and market it to me and want a markup on it without being 100% clear as to whether they have it under contract or not or what kind of deal it is, i.e. short sale, probate etc

All this lack of transparency tends to make me very very wary of wholesalers. Now so I've always thought wholesaling meant the property was under contract by the wholesaler, but I guess this is not how the industry really works? personally, I do wholesale once in awhile but only properties that I have under contract and only properties that I have carefully calculated the ARV and rehab costs and would be willing to rehab myself if I can't find a buyer.

So given the observations, what should my expectations be of a wholesaler? am I expecting too much that they have the property under contract under their own names or companies instead of daisy chaining some other wholesaler's property?

Is there even an industry standard? if there isn't, would it make sense perhaps for us to come together as a group and set certain standards so we know what the expectations are?

Just wanted to rant a little and see if there was a solution to this, or maybe I am the one that has the problem since this is how the industry works? 

Personally, yes, I think wholesaling is a very difficult model in coastal california. You might have better luck in more inland cities. Unfortunately, my previous and current experience with wholesalers here in Socal have left a really bad taste. 

The real and good wholesalers seem to be few and far in between. I think part of the reason has to do with the fact that the numbers here are so much bigger than most of the country. It's one thing for someone to take a chance with you to wholesale a 80K property versus wholesaling a 800K property. 

I think the closest I have seen so far is this company New Western Acquisitions and a few other companies like it, and even then, their ARV numbers in general are hard to comp.

Ramon, are you trying to analyze property for rent or to flip? It sounds like you are using the flipping calculator. Is that what you are trying to do?

@Richard Dunlop, since you are quoting me above, I want to clarify that I am not knocking Detroit. I think it is probably an excellent market to invest in, however, the original poster in the original thread is not from Detroit and what I was trying to explain to him is that blindly investing in a market simply to get 15% without knowing the lay of the land is risky. This blind risk is acceptable to some and unacceptable to others. I'm not knocking your market.