All Forum Posts by: Taylor E.

My point remains the same. There are middlemen in every transaction. And there’s a reason for that: there’s a demand for middlemen. God forbid they expect compensation for their skills and time. If I’m going to be upset at every middleman, then I will grow my own food and manufacture my own products. 

The beauty of a free market is that if one doesn’t want to use middlemen, they don’t have to. But to act as if the principle is unethical or shady is disingenuous, when literally no occupation is a start to finish job. You’re always working with someone. 

It is the responsibility of any business partner in any transaction to do their own due diligence and vet who they work with. If someone isn’t providing value, then that is the individual‘s fault, and his/her partners’ if they fail to address the problem. Bad experience with bad business partners doesn’t mean the business model is bad.

I think what a lot of people on this thread are missing is that ALL business involves a middleman and end players. There's reasons why people would prefer being an end player or a middleman. As long as the people you are working with are fully aware of the deal's mechanics and realize their place in the deal, there shouldn't be a problem. 

The whole entire crux of capitalism is to buy low and sell high. Landlords are middlemen between housing and the rest of the populace. Property mangers are middlemen between landlords and tenants. AirBNB host and hotels are middlemen between tourists and accommodations. Retail stores, brands, and distributors are the middlemen between manufacturers and consumers. Real estate agents are middlemen between buyers and sellers. Restaurants are the middlemen between food and customers. Publishers are the middlemen between manuscripts and readers. 
Nearly every occupation, especially in real estate, is someone being a middleman.

Middlemen add value. If they didn't add value, people wouldn't be willing to pay a premium for their services. Renters can buy homes if they want to, but that comes with credit risk, legal liability, immobility and more. Landlords could manage their own properties but that means doing all the dirty work of managing leases, screening tenants, and collecting payments. Tourists could just get a time share and buy their own towels and furniture, but who wants to do that for two weeks out of a year for every possible destination?

This dislike towards "middlemen" is founded on subjective morals instead of objective reasoning. If everyone is knowledgeable and in agreement, what's the issue? If you don't like "arbitrage", don't partake in it.

As far as the viability of STR arbitrage, it's very lucrative. If it wasn't there wouldn't be an industry around it, and major corporations like Sonder wouldn't exist. That being said, anything high reward has high risk. Make sure your lease is tight and don't accept the first lease offered to you. And of course, have an exit strategy. Frankly, if you're not willing to fully flesh out the automation of STR tenants and tussle with AirBNB, VRBO, etc. policies (or worse, use those platforms as lead generation and have your own STR booking system), make your exit strategy to be a small local portfolio that won't expand for passive income or simply get an attractive portfolio enough to sell to a big corp like Sonder (who has bought small businesses before).

Any time you're bringing in other people, you're going to want an LLC. The legal liability protection alone is enough to get one. There's also potential public privacy (depending on the set up) so disgruntled tenants, partners, etc. can't thoroughly ruin your wealth. People only sue what they can see. You don't want to lose your personal assets. Operating under an LLC also adds credibility, which can lead to more negotiating power, more financing opportunities, and more.

There's also tax breaks in formally starting a business. Especially if you're flipping, you'll want to review your potential savings on capital gains taxes. Of course, see a tax, business, and/or asset protection lawyer before rushing into anything.

Go to the county's real estate website/recorder of deeds and see who owns the deed. If the deceased is listed as the owner, unless there is a will, the property will have to go through probate, which is a long an arduous process. 

As far as I know, if there is a trust, you would need to find the trustee and ask if they are interested in selling their home. Trusts are private and therefore the documents are private, meaning you will not know who the trustee is from public record. The best you can do is contact the title company or the real estate agent who closed the deal. You may even be able to reach out to the seller (who signed the deed) and see if they still have the contact info of the trustee. This may work. 

Otherwise, you would have to just keep watching the house and see if anything happens to it. If something does, contact the new managers of that property, whether city took it for taxes, a bank for mortgages, or something else.

I don't suggest using a template contract found online from gurus or blogs. Not only is it very common and has copyright on it, it also isn't tailored to your local and state laws. I would suggest going to a lawyer and consulting with them on a template you like. Advise them on what terms and conditions you want in your contract. 

If you want to try to draft a custom contract from your template, you can look at lawinsider.com for clauses. I do not suggest this unless you have experience reading legal-ese. And even your custom contract will still need to be reviewed by a lawyer.

Provisions I suggest you add are:

• Indemnity: Make yourself immune to frivolous claims from sellers and buyers.
• Earnest Money Deposit (EMD) due at end of inspection period.
• Unlimited access to property with a lockbox if vacant, or with a 24 hour notice to tenants if occupied.
• Limitation of Damages: If the transaction doesn't close, you are not liable to pay any damages for depreciation during the term of the contract with the exception of the EMD.
• No Reliance: Seller hasn't relied on Buyer for any assessments and vice versa and each Party is encouraged to do their own due diligence and consult with professionals as they individually deem necessary
• Your Assignee (the cash buyer) is not entitled to an inspection period on their own. They must complete their due diligence by the end of your inspection period.

Always thoroughly research what other pitfalls you may be missing and ask your lawyers if there's any loopholes you aren't catching.

I'd say really evaluate why you are in real estate investment. What's your goal? Financial freedom? Time freedom? Something else? Let that drive you. If your goals don't match your actions, you'll end up being drained. I don't think you should give up. Simply re-evaluate your strategy. 

As far as not being taken seriously and fighting the old boy's clubs: shut down. By that, I mean shut down your emotional attachment to networking and business. Be analytical, and strategic. That's how the majority of "finance bros" want to be are. Match their energy. Be assertive. People are just people. There's always going to be another deal or another tenant or another partner. When they know that you know that you're worthy of respect as a business partner, you'll be surprised just how much people change. Those who can't put their personal biases aside for business will sink while others swim. Show them that you're willing to watch them sink.

I spent the majority of my like in STEM (particularly engineering and computer science) so I know exactly how it feels to be the only girl in the room, to teach someone how to fish only for them to turn around and explain fishing to you like you've never seen water before, to enter a deal with someone as a partner but being expected to work like their assistant or secretary, etc. It sucks.

And when the deal is done, go back to, what I call, your "Peace Palace". Whatever location or state you feel most comfortable. Whether it's at home with kids. Online with friends. Talking to your partner. Whatever it is. For me, it's reading a book alone while drinking a smoothie. For you, it could be chatting in a Women's REI group on Facebook or watching reality shows. It's always important to decompress after work. :)

I explained this in more detail on another recent thread (search the forum or check my profile for it), but essentially, if POF is being requested, you're probably dealing with a real estate agent. Don't try to skip around this, just ask your cash buyer if they would like to provide POF, or ask the agent if you could provide POF at the end of the inspection period.

With off-market, most motivated sellers are not going to ask unless they've been ran through by agents and other wholesalers. 

Frankly, if someone is being particularly hostile just because you're a wholesaler, go on to the next deal. Let them suffer and try to do the disposition work themselves. I've seen a lot of property drop and get desperate, even go down all the way to 10-30% of the original asking price, simply because they turned away wholesalers and their property was left on the market too long. A buyer's market is coming with the eviction moratorium and the foreclosure moratorium coming to an end. I expect a 2008-level of a crash if the government market doesn't get its act together. If sellers/agents can't adapt and do business, they'll sink instead of swim.

Personally, I do not look to gurus for good information. It's proprietary, and most of the serious ones are licensed. They're not going to give away the good strategies for free when they know they can make money on it (and they've spent time, sweat, and money equity into learning it themselves). 

I use the gurus for nominal concepts (think an intro class or the first section in a textbook unit) and "lead magnets" (the freebies they give you for signing up to their email marketing list). They're a jumping off point. From what I see and hear, the "courses" are just info you would get if you got a license, got a free consultation from a lawyer, or did some in-depth Googling. The point remains that no one's going to give up their keys. 

As far as other influencers, I look to these types of people:

• Influencers under 100k subscribers. They're more motivated to gain an audience and provide value. Therefore, they'll reveal more, be more earnest, and won't try to make courses and video chats their main stream of income.
• Asset protection and real estate lawyers. They provide the jargon (that you take to Google), processes, and core concepts that will translate to professionals that aren't investors. (Less issue working with title, lawyers, VAs, contractors, lenders, banks, sheriffs, etc.)
• Realtors/Real estate agents that work with investors, want to invest, work commercial, and know their ish in general.

As far as courses: Don't take them from some guru. They're not vetted. They don't have a lot of reviews or credibility. They cost too much for what they provide. They are not tailored to your market/strategy/level. They are not peer-reviewed, licensed, regulated, or otherwise appearing on an active professional's desk in any form. If investors were doing so well, they would be busy investing, not selling away their trade secrets. Instead try:

• Local REIA/real estate investment groups and meetups.
• Conferences and talks with finance and real estate professionals.
• Forums and podcasts.
• Well and highly reviewed books and other print resources that are established with hard facts and info. Try the textbooks universities use for their finance and business classes. And for the love of God, do not read only Rich Dad, Poor Dad.

Thank you very much for the congrats and the tips! Due to the pandemic, it's been tough making connections and building relationships with other investors, but I've been loving real estate so far. Will definitely focus on building my buyers list. Thanks again!  

Hi there! I'm a new investor in Pittsburgh and I've finally gotten over the hurdle of closing my first deal! It was a joint venture Facebook deal, so it was certainly a risk, but it worked out in the end. Now that I've grasped and experienced the wholesale process, I'm noticing that while there may be buyers/investors in the market, there's significant portion of them that can't or won't accept a majority of the deals that come their way. 

On the buyer's end, the most I've done is wholesaling and rent/house-hacking. I've never been an all-in cash buyer, but I want to get to that point. What's stopping from accepting more deals you receive? What are the setbacks during the wholesale that turn off cash buyers? How can we add value?