All Forum Posts by: Walt Payne

@Paul Choate 

Point #1:

My objection is not that the general population of users would be unable to sort out the issues here, but that a new investor might consider the source (BP official blog) and not SEE the issues. 

I am not sure that censorship exactly is the right way, but there is a definite problem with an official BP blog that includes ethical issues. Maybe create some way for a blog to be flagged as not endorsed but published as an opinion?

Point #2:

The part of the process that you are not seeing, I think, is that the seller is put under limitations by the contract before the added negotiations. 

This isn't quite the same, because it involves an executed contract without contingencies, but maybe it will make the point. You buy a ticket for a cruise. Two days into the cruise, you pull into port and the captain says he wants to renegotiate. Fuel costs were raised last month and he needs more profit, so either pay an extra $500 per passenger, or get off his ship. Your choice, free will and all that. Is that a legit negotiating tactic?

You are still comparing apples to oranges. I have bought houses from wholesalers, I have been involved in rehabs for a whole lot of years. And you know what, no realtor would touch most of those houses because they were in need of significant repair. How is a house a wholesaler buys/sells going to compete with pristine houses in good neighborhoods? Of course they sell for less. And they need even more than that 13% in repairs above and beyond the difference in price. Most rehabs/flips get at least 25% of the purchase price in rehab costs to get them to retail value. And yes, realtors deal in those, but on a much lower percentage of their total business than wholesalers. 

To say the same house would sell for 13% more is totally unfounded. There are ZERO statistics where a house was sold by a realtor and by other means at the same time and in the same condition. So that statistic is saying realtor assisted prices are higher ON AVERAGE. That is obvious, based on obvious reasons. Anyone in RE should know those reasons. If not, see above.

You see, I am not biased by my personal interests. I am speaking based on 30 plus years of experience. You are taking a statistic and twisting it to prove what your interests dictate to be the truth.

@Bill Gulley  I like your suggestion about reviews. 

The combination of the blog having the BP name, and being directed at new investors was what prompted the original post.

And that post above made it in under 30 words. Wow! Your posts are always informative, but rarely the short story. ;)

No, I am not wholesaling at all. Just laughing at your logic about the 13%. 

I was saying that you are comparing properties of unequal value, and blaming wholesalers for the difference in sale price. Let me take your 13% comparison and change it up a little. Maybe you will see how silly it is then. Or maybe you won't. 

California FSBO sale prices of property are significantly higher on average than Ohio seller-assisted deals. That must mean that Ohio realtors are not helping the buyers as much as California wholesalers, right? It works that way, using your logic. They aren't equal value properties, you say? Duh, that is the point you are ignoring in your comparison.

Paul, there is nothing wrong with using any defects to try to negotiate a price reduction. It is the premeditated intent of using known defects to try to get money out of a seller after tying up the property under contract. If you know something is wrong, the defects should be part of the initial pricing, not approached after a contract is signed. If unknown defects are found under the inspection, it is totally appropriate to negotiate a reduction. There is a difference. 

Bill, that is a totally and absolutely legit reason to renegotiate. Going into a deal knowing you are going to use obvious flaws to get a reduced price is the issue that I find sleazy and unethical.

Or might the difference be that the agent-assisted deals are on higher quality properties? You are making seriously flawed assumptions. The comparison on pricing is about as bogus as it gets! Most wholesale deals are made because the property is not retail-ready. Why is it that the average REO for the last few years was below retail for the area? It must be because the banks are giving away their money. You believe that, right? Or is the condition of the property and what the market will bear a factor in both cases?

@Adam Schuette  I have never done a seller finance deal, but I would surely do everything my lawyer says I can to protect myself, and assume that the buyer will default and cover my assets. 

I have read that raw land is the most defaulted of mortgages. I think that sometimes it is treated as speculation, and if the value doesn't go up, or not fast enough, buyers will walk.

@Michael Ran  It depends on what you mean when you say you have hit your debt limit. That could mean it is time to slow down and reposition yourself to be more financially stable. Or it could mean that you are saying you have hit a wall with financing. If the latter, there are many options out there. Owner financing is one that can be pursued. Private lenders are another. If you have acquired 16 properties, that will be enough to impress most private lenders and indicate that you know what you are doing, though that may or may not be true ;) Talk to people you know. Always be "in business mode" when having conversations.