All Forum Posts by: Jeff G.

@Brian Olson

 I second @Jeff Rabinowitz that the numbers can sometimes be misleading no matter how you gather them. I personally use Rentometer Pro and go with the lower of the average or median area rent as my rule of thumb. The other thing I do is check out Section 8's website to see what they're willing to pay, by bedroom count, with their vouchers in the same area. 

This number will differ from Rentometer's numbers but it's good to have. It may be substantially higher or lower than what you expect given the realities in the market.

I'd love to come but can't make it that week. Let me know when your April meetup is.

@Brett O. go to your local Home Depot or Lowes about 15 minutes before they open. See who's there to buy stuff. Many of them are contractors, and they're the dedicated ones. The ones that show up "bright and early" at 10 AM aren't the crowd you're looking for.

@Nick Deshotels

I need at least three good comps to come up with ARV. If you have three comps for example add up the sales prices and divide by three. This works with price per square foot as well as like property recently sold in the area.

Personally, I subtract 3% from this figure and call it the "target flip price" in an attempt to insulate my end buyer from fluctuations in the market. But, that's your call.

@John Thedford

 Ok, now who's overreacting? Wholesalers serve a legitimate purpose in the market. I'm new to this game and I quickly found that the best source of deals are homes that can't get mortgages because they're to dilapidated.

I'm new, I'm still learning, and I occasionally don't know as much as I think I do as a result. Experience and fruitful conversations like this one with people who've been at this a lot longer will solve all of that in time.

Each house I get under contract gets inspected and if the scope of work from the inspection comes back with a price point that's just too high to be profitable for my end-buyer, I move on. 

People like to malign us sometimes--and my misplaced anger and bad advice early on in this thread didn't help. But, we serve a legitimate function in the market place. Without us, damaged inventory would stay put a lot longer and both the individual home owner and the market as a whole would suffer for it.

Oh, boy. @John Thedford I over reacted with my first post. But, on the point of clouding title:

If you have a legitimate contract with the seller to buy (and/or assign to by) a house with a clear expiration date, you're not "playing games." I've never personally clouded a title with a wholesale contract. Some wholesalers do it, other's don't bother because it's an extra step. Wholesale contracts are good for a limited period of time, they expire, typically in 30 to 90 days. It's only a "problem" for someone else who comes along and tries to sell the house from underneath you during that limited time period.

Somebody please correct me if I'm wrong and this is a bigger problem than I think it is.

I don't personally do it and I probably won't for the foreseeable future. It's an extra step that isn't strictly required. Now, the first deal that falls through because somebody else sells it out from underneath me because I didn't take the time to cloud title for a whole 60 days (tops) is probably going to do a lot to change my mind.

You're right @Micah Copeland, thought in my area the prices tend to be a lot closer when someone else has an option on an already existing wholesaler contract: a few thousand bucks here or there. I over reacted.

@Kyle Bigger I'm glad I made that mistake here--where there are others to speak up and say there is more than one interpretation of the facts--and not in real life.

Sorry @Nick Stango I didn't realize you knew these guys.

A friend of mine was recently caught up by a real estate related scam and I have that a little too fresh in my mind... Long story short she put a house on Craigslist for rent and then noticed a rogue ad a week or two later with different contact info--offering to rent her house at a different price. She called the guy up and he pretended to be the owner, yadda, yadda yadda. I read your post and got ticked off and just didn't want to see somebody go through anything similar. I apologize for the overreaction.

I'm going to chalk this up to a "cheap lesson." Thanks again guys... I'm still learning and I'm humble enough to know I'm not a Jedi yet. :)

Good luck finding your next deal Nick!

Ok, @Nick Stango I just didn't want to see good people get screwed.

I agree with @Brent Coombs something looks about as kosher as pork chops at a bar mitzvah. My knee-jerk reaction was walk away, but now I'm thinking better of it. In this situation @Nick Stango you might consider doing the following:

• Contact the wholesaler you've been working with: tell him you're close to making a decision and would really like a contract. Please email it to you.
• Call or email the other wholesaler and tell him, "hey, I know the area well and I pass that house every so often please email me a contract. I'll have it back you you in a couple of days, I just have to run it by my wife..." Don't go see the place.
• While you're waiting for Yahoo 1 and 2 to get back to you look the homeowner up on public records.

If the home owner lives nearby GREAT! When you have a copy of both contracts (and email printouts of the emails they sent) go knock on the home owner's door at a reasonable hour. Introduce yourself and let them know that you were approached by someone trying to sell their house and you're interested in buying but you're suspicious that something isn't right about the situation. You don't want to get ripped of and can't "just walk away" without being sure THEY are not being ripped off by this guy. Ask them if they have 15 minutes to talk to "compare notes" about the situation.

If they don't live near by, then it's a different ball game you'll have to try this over the phone (much harder) and might get hung up on. IF they slam the door in your face because they're not listening to what you're actually saying--then you can walk away and not before.

If, however, they actually listen politely explain the situation:

• You had reason to be interested in 123 MAIN ST because you're an investor.
• Yahoo 1 appeared to have the property under contract... show them a copy of the contract and Yahoo 1's email.
• Then tell them you got suspicious when he didn't have keys to the place. I should note: it's probably unwise to admit you entered the property, even though you had a good faith belief the place was under contract and you had permission to enter... you may make the actual owner feel very violated and their response could be unpredictable and include things like police (if you're lucky) or buckshot (if you're not.)
• Tell them your suspicions grew when you noticed Yahoo 2 also had the property "listed" at a much higher price. Show them that contract and that email.
• Reiterate you don't want to get scammed and you'd be beside yourself if they got scammed and you found out about it later. See what they say. 

They might in fact know these guys and be able to shed light on the situation, but they'll probably be confused as heck. Leave them a copy of the evidence and your card. If you get a call from the police and they ask to "interview" (interrogate) you tell them "Not without the presence of council [a lawyer.]" No matter what they say reply, "I'm sorry sir, given the gravity of the situation I can't make statements without the advice of counsel." Period. They have enough evidence with the printouts.

As for why you shouldn't talk to the police even though you're just bringing evidence of what is reasonably likely to be someone else's wrong doing, see:

• Don't Talk to the Cops, part 1
• Don't Talk to the Cops, part 2

It's really up to you if you want to go through all this trouble. But if you were in the home owner's shoes wouldn't you want to know? I sure as hell would.

PS: I'm not a lawyer. I just read books and watch YouTube videos. This isn't legal advice.