All Forum Posts by: Chris Kennedy

Intently waiting for the update ;)

@JR T.

I also concur that typically, a wholesaler that pitches MLS deals will ruin relationships. I've gotten to the point that I am hesitant to deal with many of our Tampa wholesalers. Unless they explain otherwise, if you aren't able to give me the address on the first call/email then the conversation is over. "I can't tell you the address but I can tell you its 100k 3/2 1600sqft in xxx town." Are you serious? SMH. I will gladly explain an option contract to them if they are new, but if they start the "it's complicated story I'm out".

I also agree with the MLS comment regarding running all the numbers again. Typically, in high activity markets, unless you are there day 1, hour 1 on the listing, it's already been looked over by dozens. 

With that being said, I've spent hours looking at MLS deals. There are some that sold for a substantially lower priceand then immediately re-marketed and sold. The underlying trend in the ones I saw was POOR or incorrect marketing.

Some Examples:

Two Duplexes (4 units) being erroneously listed in MLS as one duplex. Pictures of both duplexes were very similar. At first glance it seemed like an overpriced duplex, until you realized what happened.

Inground pools. I've come across two low comps that sold with pools. However, the pool feature was not listed in MLS and there were no pictures of it. In our area, many agents will exclude the pool pictures if the pool is not currently maintained. Permit, satellite and house visit confirmed there were pools.

Horrible pictures. This one speaks for itself. 

I want to comment that these are VERY rare, however, when you spend alot of time on MLS, you do see them.

@Larry N. I've heard of the shell LLC interest play. I even considered doing it myself. However, what happens if the LLC isn't recently formed? What if the LLC took on corporate debt that the buyer doesn't know about? What happens if the LLC has outstanding debts to contractors regarding other houses they signed corporately for.

Years later, I realize it's a creative approach but one that comes with risks and complications.

I would much rather purchase into a newly formed land trust and sell the beneficial interest. Just my opinion though.

This is a strategy that is being played by wholesalers in our Tampa Bay market. I don't necessarily agree with it, but I understand it.

Essentially people scour the MLS for potential deals, then, if the seller is pressed to sell for any number of reasons, they agree to a low ball price. Then, the wholesaler "markets" the property via email blasts, signs, REI meetings, etc to source a buyer. Typically the wholesaler will ask the original price in MLS.

To answer your question:

Yes, you would sign the real estate contract and make sure you have it setup as assignable.

Then, upon acceptance the EMD (Earnest Money Deposit) will be due, or in the timeframe that is stated in the contract.

As a seller, you can counter this strategy by:

public record searches, non assignable contracts, non-refundable deposits, short "as-is" inspection periods of a couple days, account/bank specific proof of funds, and high amount immediate deposits being due. 

Touching on what everyone else has mentioned, it can be illegal. In Florida, you can not provide a commission to an unlicensed real estate agent. This includes promises of kickbacks or helping a friend sell his house for a certain % or compensation.

I would have to dig out the statute, but I believe it's a 3rd degree felony now in Florida.

However, there are a plenty of options for you:

1. Assignable contracts

2. Double closings

3. Option contracts

4. List subscription

If you search the BP site, you will find alot of information on each subject.

What you CAN NOT do is tell someone, "Hey I'll give you $1,000 if I end up buying the house"

Feel free to msg me anytime.

Keep in mind I am not an attorney, and this is not legal advice.

How's your investing going? Ever find a deal in Brandon? We work in the same market.

Welcome. I'm also an investor located in Riverview, FL. I've been doing this for some time now (6 years). If you ever want to meet up or need help on a deal, feel free to message, text or call me.

Goodluck and welcome!

Welcome. I'm also an investor located in Riverview, FL. I've been doing this for some time now (6 years). If you ever want to meet up or need help on a deal, feel free to message, text or call me.

Goodluck and welcome!

@James Steffy 

Hello James,

We share the Tampa Bay market with you. If you have any questions, need advice, or ever want to just chat it up about real estate feel free to call or email. We do JV's with people in the area.

I think it depends what your overall game plan is with your real state investing. Leverage will always produce higher potential returns but will also provide additional risk. I agree with the statement that you should count For the 10 percent management fee regardless. Your plans might change down e road if you decide to scale.

For my particular situation,  I don't payoff extra debt unless it is hard money or a unique circumstance. One of my rentals is sitting on a 2.75 interest rate, so f I'm making let's say 25% yield per year the extra cash is more valuable to me. I still maintain a w2 income though, so I can afford the risk of the extra leverage. 

Like others mentioned tried to reinvest as much as you can. Spending 50k of your profit each year can really hurt you 20 years from now.

Goodluck in all your investments! Sounds like you are off to a good start