Newbie Question(s): Buying from wholesaler from out of state

13 Replies

Hi,

I’m new to this whole process. I’m looking for some advice and help. Here’s where I’m at:

1) I’ve found a wholesaler that has properties in Indiana that they’re selling.

2) I did the math and the returns makes sense.

3) I’m in the process of negotiating the purchase.

4) They’ve sent me the purchase agreement and my lawyer has looked at it.

5) I’ve went back to the wholesaler and requested some additional documentations. (disclosures, survey, inventory of the rehab that has been done)

6) I’ve also checked on (https://msc.fema.gov/portal) and (http://www.floodtools.com/Map.aspx) to make sure the property is not in a flood zone. {it looks like it’s not}

So here are some questions:

1) I didn’t get any other documentations regarding the property aside from the purchase agreement. Is that normal? If not, what other documentations should I be requesting?

2) My lawyer says that there’s usually a set of documents when purchasing properties. (I’min California. My lawyer is more familiar wth California.) So does anyone know what the standard sets of documents that I should request? I would assume at least a survey to outline the property line and structure dimensions right?

3) My lawyer also says that I should conduct a inspection from an independent local inspector. Anyone has any idea on how to find one and what is the typical cost? (It’s not a big piece of property. Standard single family home.)

Thanks in advance for any help. Happy to discuss in more details if you just want to drop me a direct message.

Thanks,

Donnie

P.S. Sorry for the duplicate posts in the other threads. I’m still new to this site and I’m not sure how to get the best response yet. 

What area of IN?

Marion County

zip is 46218

Does the county matter in terms of what I need to get for documentations? Doe sit differ from county to county?

Donnie,

I live in Indiana, but not in Marion County. I know most of the wholesalers in that area, the good ones and the bad ones! If you want to private message me, I can probably help you. Good Luck!

@Scott Steffek  Thanks Scott, just sent you a PM/request to connect. Let me know if that doesn't go through. Thanks!

@Donnie N. , there are some really awesome parts of Indiana. There are some really AWFUL parts of Indiana, too.

It is worth a $250 plane ticket to check out the area before you buy properties. 

Mindy,

I am in the west central Indiana market and also work in central Indiana. Finding a good inspector would help give you more detailed information. There are several things to look for when finding someone to properly and professionally assess the property. Also what services are you needing? Radon, Termite, Thermal, etc... Several outfits only offer the inspection.

They should be licensed in Indiana through Professional Licensing Agency, carry General and E&O insurance, send you digitally documentation with photos and videos, and offer other items as part of the inspection package.

You could send me an email off thread and I'd be more than happy to talk more in depth with you. I just joined so I am still unclear on "bad post behavior" and "good". LOL

BEFORE you deal with any unlicensed broker consider these ideas:
1. Always require WRITTEN comps that can be substantiated

2. Always require WRITTEN bids from LICENSED contractors
3, Always require WRITTEN comps to substantiate ARV
4. NEVER pay a non-refundable fee
5. Always correspond via email so there is written record to bring suit in the event of misrepresentation.
6. Always demand to see a copy of their contract.

Remember, these are middlemen trying to play RE agent without a  license.  Make sure they provide GOOD comps. Make sure if they are representing an ARV value make them provide ARV comps. If they make claims about rehab costs, make them provide WRITTEN bids from contractors. They are brokering real estate so make them PROVIDE good quality information like you could get from a licensed broker. Many of these unlicensed brokers simply make up figures that sound good but cannot back them up.

Unlicensed brokers generally have no insurance. From personal experience most just pull their ARV out of thin air. Lets see: claim it costs x and it will sell for y. If someone uses an agent, an agent won't provide or should NOT provide the BS an unlicensed broker does. They should not or do not provide rehab figures (to protect themselves). They should tell a prospective buyer to get their own bids. They can provide comps in some situations on an updated unit vs an original unit. Agents have something to lose, can be fined, and have their license suspended or revoked. Unlicensed brokers, acting as fringe operators skirting the laws have nothing to lose. They are acting as an agent without the laws, ethics requirements, education, and insurance that are vital IMO

Thanks @David Warren and @Mindy Jensen

Since this is my first go at it...I want to see how it goes from remote. I want to see if it's possible to do ti from remote. @David Warren I'll shoot you a note separately about the inspections.

@Donnie N.

Buyer BEWARE!!!!

Especially since this is your first remote rodeo be very careful.  @John Thedford has a lot of good points. I am a prior RE agent and appraiser so I am confident of my abilities to inspect a place and evaluate a value, ARV etc. When dealing with wholesalers you have to be able to trust that they know what they are talking about. Unfortunately anyone can numbers, fake comps, ARV etc. In a situation where I can't see and inspect it myself I have to have someone I absolutely trust doing it for me and having a licensed and insured professional comes a long way in those cases.

If you have done plenty of RE investing experience yourself you will have a good knowledge base to work from concerning values etc.  I would in a heartbeat suck up the cost of a plane ticket etc. and inspect where you are putting large amounts of cash.  

Double check the flood zone, almost all marion county is newly in flood zone

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