All Forum Posts by: William Hochstedler

Utah and many other states have been cracking down on wholesaling because the regulatory bodies view it as practicing real estate without a license.  If you do it with a license, there is some ambiguity with what needs to be disclosed and agency representations.  Moreover, in Utah the state approved purchase contract has a clause in it regarding assignability that requires seller's permission.

By purchasing with an LLC the same buyer closes on the deal as the buying entity in the purchase contract. This avoids some of pitfalls above. The same thing can also be accomplished with trusts as the buying entity.

A disposable LLC only costs $70 to register in Utah. So it's not that cost prohibitive.

But you definitely want to be talking to an attorney before getting into this to make sure your entities and assignments are done correctly.  

@Jeffrey S. Breglio has a lot of good resources for wholesaling with an entity as the buyer.

Good luck!

@Nathan Schiess

Virtual meeting?

I'm not an attorney, but I'd give your tenant the whole section of code pertaining to residential security deposits:

From Utah code:  https://le.utah.gov/xcode/Title57/Chapter17/57-17.html

Effective 5/8/2018
57-17-3. Deductions from deposit -- Written itemization -- Time for return.

That's the most sensible analysis I've seen yet.  I would add a couple of things:

I think we will see some exuberance of pent up buying/selling during the first part of Ken's lag.  There is a lot of active demand that has been deferred until buyers can shop more freely.  This will give the market a boost in Q3 & Q4.

The other thing that nobody seems to agree with me on is that the economy was sucking air going into this whole thing.  The stimulus from the 2017 Tax bill has nothing left and was providing a lot of boost to economy in 2018 and 2019.  This was the time that we should have been tightening interest rates, but they were kept artificially low because inflation was more of a benchmark target than any sort of rainy day reserve.  Much of the real estate activity over the past two years has been largely driven by factors that have all been used up prior to Covid.  The rest of it was consumer confidence and unemployment rates (jobs).  So what's left?

So the big question in my mind is what's everyone doing for the next 12-24 months?  I didn't just sell $200M in 2019! So I can't sit on the sidelines waiting.

@Account Closed is from Out West Somewhere.  But apparently not Utah!

He offers great advice, Demar.  Make sure you pay close attention to everything he says.  Then start searching for marketing to foreclosures.  When you know what your state's trigger is for starting the foreclosure process you can get those lists and door knock for not very many $$.

If you ran their credit you need to make sure you are compliant with those regulations.  Is this included in the Cozy package?  Definitely look at their guidelines/requirements if you pulled credit.

My biggest take-away from 2008 is stabilize stabilize stabilize.  Limit your exit horizons so you're not exposed to market conditions 6 months out.  I want my whole portfolio to have low-rate stable financing or sold by the end of the year.

This isn't going to be over when people can eat out again.

I can't help the sense of deja vu from when Bear Stearns collapsed.  Nobody thought it was even a thing.  My Wall Street friends told me they had management issues or that it was a needed market correction.  Today too many people are saying we will be back on February's trajectory by Q4.  But every market indicator (except for inventory) was moving in the wrong direction before Covid hit.

The government came late to the game with $700B then.  This time it's what, $6T?  Is that free money with no consequences?

One of those R's is rent. What are you getting for rent in a $200K+ property? I find that to be the problem. Even if I can force the equity, I don't gain much cash-flow by buying distressed properties in this price range with the BRRR strategy.

I do these in Ogden whenever possible and have a few of them.  It's very very very hard to find properties that work in a way which allow you to get all your cash back.  You still see a tiny percentage from wholesalers that come close.  But it's slim pickings indeed.

Are you moving to Charlotte?  

Cash-flow and taxes aside, having your first rental 2,000 miles away should give you pause right there.

FHA is designed for owner occupants of 1-4 unit residences. Buying a fourplex with an FHA loan is a great plan!