All Forum Posts by: David Begley

Got it! Thanks Aaron, I was under the assumption I needed to do the W-9 and 1099 if the Contractor is an LLC too. This is good to know that collecting and reporting that information isn't required when contracting with an LLC.

 Thank you for the reply Aaron, that was my thought as well.  With respect to the EIN, I would only request that for W-9 information.  I was under the impression I would need to file a 1099-MISC for any contractor I pay in excess of $600 during the year.  

I am interested to know if most seasoned rehabbers out there require a Contractor you wish to contract to provide their General Contractor's license information and federal tax ID as part of the contract? The reason I ask is that I assumed this would be a no-brainer - anyone that is rehabbing and pulling Permits in Georgia must be licensed; however, I am getting some pushback. Am I talking to unscrupulous contractors, or is there a valid reason not to provide this information? Thank you!

I am interested to know if most seasoned rehabbers out there require a Contractor you wish to contract to provide their General Contractor's license information and federal tax ID as part of the contract?  The reason I ask is that I assumed this would be a no-brainer - anyone that is rehabbing and pulling Permits in Georgia must be licensed; however, I am getting some pushback.  Am I talking to unscrupulous contractors, or is there a valid reason not to provide this information?  Thank you! 

 Wayne, when you go into Walmart and make a purchase, how many times has the sales clerk charged you for the merchandise + applicable tax and then also informed you that you owe that amount PLUS the tax and delivery costs associated with purchasing that item from their vendor?

Also, Wayne, how many times do you think EVEN A USED CAR DEALER (excellent analogy, btw) has a situation where they procure a car from one of their sources - auction, private individual, etc - and don't sell it within a number of days and decide to stop payment on their seller and tell them to take the car back because they weren't able to sell it and are too poor and morally bankrupt to buy it themselves?

Absolutely ZERO.  Do you know why?  Walmart and even the used car industry has stricter regulatory and moral guidelines than many in the Wholesaling industry possess.  

6% cap doesn't sound too bad!  I've been trying to put together a project/syndication in Nashville the last few months.  In the Gulch and Music Row areas,  4.5% to 5.0% cap is the norm.  Stupid prices....  

@Ryan Dossey  If the end buyer definitely agrees to pay both closings and has had this fact adequately explained to them, then I wouldn't think it would be frowned upon. 

HOWEVER, in Atlanta anyway, there are scores of these unscrupulous Wholesalers that use non-standard PSAs and think that if the Buyer initials each page, including the page with the double closing terms inserted/hidden, they are "adequately" disclosing. These are the folks giving the honest Wholesalers a bad reputation. These are the same ones that have also collected both an EMD and a "non-refundable" deposit so that when the Buyer is surprised at closing and walks, the Wholesaler can keep their "non-refundable" deposit. The Wholesaler walks away with their paltry fee leaving two pissed off parties at the closing table. These "Wholesalers" prey on Newbies and do not have a business model geared toward repeat business.

Awesome story @Brian Gibbons ! 

 "It takes courage to grow up and become who you really are." -e.e. cummings

@Account Closed 

I agree 100%, and I've yet to be shown a deal that the Wholesaler didn't sneak in a clause requiring the end buyer's money to pay the A to B closing costs. An "above board" Wholesaler should be able to use their respective state's realtor associations approved Purchase & Sale Agreements to close, but few will. The most egregious offense, IMHO, is the Wholesalers that use contracts to require BOTH an EMD and a non-refundable deposit on top of that. Should be illegal.

I read some of these replies and can understand even better why so many wholesalers have reputations just below used car salesmen. It is littered with folks with little or no real estate training outside an overpriced one day seminar; those that don't disclose to both parties the risks of double-closings - or even that there will be a double closing; non-refundable "deposits" in addition to Earnest Money Deposits; absurd ARVs and comps; wild *** guesses for repair costs; offering MLS listed properties to unsuspecting newbies; etc, etc. It is unbelievable that this practice isn't better regulated to weed out these types.