Getting Started in Wholesaling

19 Replies

Hello BP,

I've recently become a full time real estate investor in the greater Knoxville area. I'm getting started working in wholesaling in the area with a goal of learning to become a successful real estate investor, while working at generating capital to invest into my first flip property. I'm currently looking for properties in the Knoxville area, and I'm looking forward to working with and the opportunity to learn from  the motivated cash buyers and investors in the area to help rebuild and revitalize our communities across the greater Knoxville area and hopefully the United States.

Thank you

Hey Tyronza,

What do you have planned to get leads? Anything besides BP?

At the moment, I'm driving for dollars, knocking on doors, talking to home owners of "For Sale By Owner" properties, and destressed properties.

I'm currently working to close my first deal on a couple of properties, and have had the opportunity to work with a couple of experienced cash buyers in the area who have been a blessing in helping me learn and working with me through this deal with invaluable information and guidance. ,I'm looking forward to building my network, property lead, cash buyers list and working with more and more investors of all levels of experience.

If I may offer a suggestion to help.....

Make contact with a title company.  They all have marketing reps who can provide you with a trustee sale list.  These are people who have been given notice (90 days notice) that their current lender is going to foreclose.  This will be a hot target list. for you to pursue.

Some of them will be owner occupied, and some may not, but the list should give you the info you need to pursue them.  Then, it may make your driving for dollars more productive.

In turn, bring your deals to the same title company.  You will get an investor rate for repeat business, and continue to get your new lists.

Originally posted by @Cara Lonsdale :

If I may offer a suggestion to help.....

Make contact with a title company.  They all have marketing reps who can provide you with a trustee sale list.  These are people who have been given notice (90 days notice) that their current lender is going to foreclose.  This will be a hot target list. for you to pursue.

Some of them will be owner occupied, and some may not, but the list should give you the info you need to pursue them.  Then, it may make your driving for dollars more productive.

In turn, bring your deals to the same title company.  You will get an investor rate for repeat business, and continue to get your new lists.

Not to be a wet blanket but that is a RESPA violation. 

Title companies don't have such lists. If they get them, they paid good money for them. And if you're getting anything of value from a title company in exchange for your business or referral business, that is a violation.

That said, this type of thing happens all the time. You just don't see people talking about it in public forums like it was standard operating procedure.

Originally posted by @Tom Gimer :
Originally posted by @Cara Lonsdale:

If I may offer a suggestion to help.....

Make contact with a title company.  They all have marketing reps who can provide you with a trustee sale list.  These are people who have been given notice (90 days notice) that their current lender is going to foreclose.  This will be a hot target list. for you to pursue.

Some of them will be owner occupied, and some may not, but the list should give you the info you need to pursue them.  Then, it may make your driving for dollars more productive.

In turn, bring your deals to the same title company.  You will get an investor rate for repeat business, and continue to get your new lists.

Not to be a wet blanket but that is a RESPA violation. 

Title companies don't have such lists. If they get them, they paid good money for them. And if you're getting anything of value from a title company in exchange for your business or referral business, that is a violation.

That said, this type of thing happens all the time. You just don't see people talking about it in public forums like it was standard operating procedure.

 No it isn't.  You should re-familiarize yourself with RESPA.  If a title company REQUIRES you to use them in exchange for trustee sale lists, that would be a potential RESPA violation.  I wasn't suggesting that at all.  What I was speaking to was the benefits of having a relationship with a title company.

These lists cost the title company little to nothing as they are usually generated in house as who better to have access to title/tax records than a title company?!

Additionally, the title company has a SLEW of resources that they offer to anyone as I mentioned in my post.

What I think you may be mistaking for a RESPA violation is when a vendor (title company, lender, home warranty company, etc) pays for all of the expense of doing a mailer for a Realtor.  This is a clear violation of RESPA.  RESPA requires that the investment made by the vendor has to represent equal exposure for the investment.  In other words, if the vendor pays for 1/2 of the mailer, their business should occupy 1/2 of the mailer.

Otherwise, there is nothing wrong with accepting, or asking for items that the title company has at their disposal, as long as they are not requiring you to utilize their services as part of the resources.

Hope that helps clarify.  Best of luck!!

Originally posted by @Cara Lonsdale :
Originally posted by @Tom Gimer:
Originally posted by @Cara Lonsdale:

If I may offer a suggestion to help.....

Make contact with a title company.  They all have marketing reps who can provide you with a trustee sale list.  These are people who have been given notice (90 days notice) that their current lender is going to foreclose.  This will be a hot target list. for you to pursue.

Some of them will be owner occupied, and some may not, but the list should give you the info you need to pursue them.  Then, it may make your driving for dollars more productive.

In turn, bring your deals to the same title company.  You will get an investor rate for repeat business, and continue to get your new lists.

Not to be a wet blanket but that is a RESPA violation. 

Title companies don't have such lists. If they get them, they paid good money for them. And if you're getting anything of value from a title company in exchange for your business or referral business, that is a violation.

That said, this type of thing happens all the time. You just don't see people talking about it in public forums like it was standard operating procedure.

 No it isn't.  You should re-familiarize yourself with RESPA.  If a title company REQUIRES you to use them in exchange for trustee sale lists, that would be a potential RESPA violation.  I wasn't suggesting that at all.  What I was speaking to was the benefits of having a relationship with a title company.

These lists cost the title company little to nothing as they are usually generated in house as who better to have access to title/tax records than a title company?!

Additionally, the title company has a SLEW of resources that they offer to anyone as I mentioned in my post.

What I think you may be mistaking for a RESPA violation is when a vendor (title company, lender, home warranty company, etc) pays for all of the expense of doing a mailer for a Realtor.  This is a clear violation of RESPA.  RESPA requires that the investment made by the vendor has to represent equal exposure for the investment.  In other words, if the vendor pays for 1/2 of the mailer, their business should occupy 1/2 of the mailer.

Otherwise, there is nothing wrong with accepting, or asking for items that the title company has at their disposal, as long as they are not requiring you to utilize their services as part of the resources.

Hope that helps clarify.  Best of luck!!

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

Originally posted by @Tom Gimer :

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

@Cara Lonsdale   @Tom Gimer   good discussion

while this is common out in the west... most east coast or attorney driven states do not have title plants and the title co won't deal with the public.. 

Cara we have it so good out our way its not even funny.  I remember one closing were I sent a set of docs to one closing attorney that was for another attorney in town and wanted to save on fed ex.. I asked him ( and I close a bunch with them) I said would you have a courier deliver those docs.. Crickets they had never heard of a courier service.

out our way title / escrow will courier anything you want within there market for no charge.. LOL

customer service makes houses calls they do all sort of things for investors and realtors.. in fact WFG right now is overhauling all my computer security for free guy comes right to my office.. Un heard of on the east coast.. 

Or attorney states.

this being a national forum.. we have to remember many folks out east will never have heard of customer service .. or what the title co do to earn our business.

the folks out there use them like they are personal attorney... were AS THE only way we talk to an attorney is if we are getting sued LOL

carry on  on your respa  conversation I have to do my NMLS CE tomorrow I will ask the instructor about this as well from a national perspective

@Tom Gimer   @Cara Lonsdale   and in Vegas the Clark county trustee sales are held in the parking lot of a title company.. they have all the lists right there anyone can have them.. plus bottles of water LOL...

Originally posted by @Jay Hinrichs :

@Tom Gimer   @Cara Lonsdale  and in Vegas the Clark county trustee sales are held in the parking lot of a title company.. they have all the lists right there anyone can have them.. plus bottles of water LOL...

 You bring up a good point!  I appreciate your comments.

As RESPA is a national thing. I pulled this from the NAR website regarding our discussion. I thought it might be of help, or provide some clarity.

***********************************
3. Exceptions to RESPA's Prohibitions

Not all referral arrangements fall under RESPA’s referral restriction. In fact, RESPA and its regulation feature a number of exceptions. Three examples are:

  • Promotional and Educational Activities
  • Settlement service providers, such as mortgage bankers, mortgage brokers, title insurance companies, and title agents, can provide normal promotional and educational activities under RESPA.
  • These activities must not defray the expenses that the real estate broker/agent otherwise would have had to pay.
  • The activity cannot be in exchange for or tied in any way to referrals.

************************************

The post went on to other items that didn't relate to our topic here, but I thought I would post it. That can be found on the NAR site at https://www.nar.realtor/ae/manage-your-association...

Anyway, good discussion guys!  Thanks.

Originally posted by @Cara Lonsdale :
Originally posted by @Tom Gimer:

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

We were discussing the provision of a list of pre-foreclosures to investors.

To assemble such a list in this part of the country we would need to scour land records for recordings of appointments of substitute trustees or visit courthouses to review dockets for new foreclosure cases. <--- these are things of value, imo

The thought of giving someone a sample contract gives me nightmares. No thanks. I keep our staff out of contract issues other than interpretation.

Choice of Tenancy forms are not "anything of value" under RESPA. They are a necessary element of our buyer information packet.

Originally posted by @Tom Gimer :
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

We were discussing the provision of a list of pre-foreclosures to investors.

To assemble such a list in this part of the country we would need to scour land records for recordings of appointments of substitute trustees or visit courthouses to review dockets for new foreclosure cases. <--- these are things of value, imo

The thought of giving someone a sample contract gives me nightmares. No thanks. I keep our staff out of contract issues other than interpretation.

Choice of Tenancy forms are not "anything of value" under RESPA. They are a necessary element of our buyer information packet.

 So, you just proved @Jay Hinrichs point.

We all have different situations based on our location.  It doesn't make these RESPA violations that some states do things that other states wouldn't touch, it just means that we have different business practices based on our markets.

Originally posted by @Cara Lonsdale :
Originally posted by @Tom Gimer:
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

We were discussing the provision of a list of pre-foreclosures to investors.

To assemble such a list in this part of the country we would need to scour land records for recordings of appointments of substitute trustees or visit courthouses to review dockets for new foreclosure cases. <--- these are things of value, imo

The thought of giving someone a sample contract gives me nightmares. No thanks. I keep our staff out of contract issues other than interpretation.

Choice of Tenancy forms are not "anything of value" under RESPA. They are a necessary element of our buyer information packet.

 So, you just proved @Jay Hinrichs point.

We all have different situations based on our location.  It doesn't make these RESPA violations that some states do things that other states wouldn't touch, it just means that we have different business practices based on our markets.

I'm happy to hear what @Jay Hinrichs instructor says about this. Side wager? :)

Originally posted by @Tom Gimer :
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

We were discussing the provision of a list of pre-foreclosures to investors.

To assemble such a list in this part of the country we would need to scour land records for recordings of appointments of substitute trustees or visit courthouses to review dockets for new foreclosure cases. <--- these are things of value, imo

The thought of giving someone a sample contract gives me nightmares. No thanks. I keep our staff out of contract issues other than interpretation.

Choice of Tenancy forms are not "anything of value" under RESPA. They are a necessary element of our buyer information packet.

 So, you just proved @Jay Hinrichs point.

We all have different situations based on our location.  It doesn't make these RESPA violations that some states do things that other states wouldn't touch, it just means that we have different business practices based on our markets.

I'm happy to hear what @Jay Hinrichs instructor says about this. Side wager? :)

 Always up for a side wager... lol.  Thanks for the spirited debate.

Originally posted by @Cara Lonsdale :
Originally posted by @Tom Gimer:
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:
Originally posted by @Cara Lonsdale:
Originally posted by @Tom Gimer:

Sorry, but I'm in charge of compliance at a title company... so I'm familiar with the subject matter.

When our marketing reps come to me with ideas like this, I nix them.

Best of luck to you.

So, are you telling me that your title company doesn't offer open house registers, sample contracts, Ways to take Title sheets, FSBO manuals and so forth??? These are not RESPA violations. They are marketing materials to help assist the public with real estate transactions. I am not sure why you think these are compliance issues. They are not.

We were discussing the provision of a list of pre-foreclosures to investors.

To assemble such a list in this part of the country we would need to scour land records for recordings of appointments of substitute trustees or visit courthouses to review dockets for new foreclosure cases. <--- these are things of value, imo

The thought of giving someone a sample contract gives me nightmares. No thanks. I keep our staff out of contract issues other than interpretation.

Choice of Tenancy forms are not "anything of value" under RESPA. They are a necessary element of our buyer information packet.

 So, you just proved @Jay Hinrichs point.

We all have different situations based on our location.  It doesn't make these RESPA violations that some states do things that other states wouldn't touch, it just means that we have different business practices based on our markets.

I'm happy to hear what @Jay Hinrichs instructor says about this. Side wager? :)

 Always up for a side wager... lol.  Thanks for the spirited debate.

Yep, good stuff.

I guess technically I could figure out a way to give this type of arrangement my blessing -- such as for cash buyers, commercial properties, or some other exception.  But as you saw my interest is always piqued when anything of true value is considered to be offered to any players.

@Tom Gimer   @Cara Lonsdale   the other thing we all have to realize like in our state the title plants have moved over to the phillippines.. they are paying 2 bucks an hour to run title LOL..

in my day when I did pre foreclosures my title company ( Chicago) gave me a list every day of every NOD in the 3 county metro area ( 2 million peeps) and kept it on a spread sheet for us.. it also included 1 nd 2 nd 3 rds tax's and IRS stuff.. basic date downs... all real time all uploaded daily for me. however we gave them a 150 orders a year and I owned a real estate brokerage with another 50 agents..

can the one off investor expect this probably not.. just like anything in the US it deepends on what value you bring to someone or some business.

This post has been removed.

Welcome to the forum, and congratulations on the end of your life of employment by others! Now let’s create a real estate income of your very own.

You mentioned that you’re working to generate capital for your first flip. Good news: you don’t need it. Although common knowledge these days is that a “flip” is a quick purchase and resale, a flip is actually a transaction wherein an investor controls a parcel of real estate and sells his interest in it prior to purchase. Control is the key word to remember. You don’t need to buy real estate to make money, you can control it. Start by finding an equity opportunity, then use a one or two-page contract that gives you the right (but not the obligation) to buy. Also, secure the right to enter the property and the right to advertise it. Give yourself 60 to 90 banking days to close (Hint: 90 banking days is NOT 3 months!) Give yourself the right to extend your contract. Finally, give yourself the right to cancel the agreement.

Next, advertise your opportunity. Signage, word of mouth, door to door, B2B, etc. Your buyer will often come from the neighborhood itself. When you find an interested party, simply write an assignment agreement. Collect as much of your assignment fee up-front as possible. Then, to ensure a smooth transaction, guide your assignee towards closing. Require your assignee to order title work within 48 hours. Always make your assignee’s closing deadline earlier than yours in case they don’t perform and you have to remarket the opportunity. Be sure to include a “hold harmless” clause in the assignment agreement; but if the seller cannot provide a good title, then it’s always a good policy to refund the assignment fee.

One more thing - I recommend not calling yourself a wholesaler. Every real estate buyer is a wholesaler. When you call yourself a wholesaler, you’re pigeon-holing your entire real estate investing experience into a single category. I Control & Roll® (“wholesale”) properties all the time, but my goal – and the goal of most savvy investors – is to create the gift that keeps on paying. To find those portfolios (“keeper”) properties, we might go through a dozen wholesale transactions. If I called myself a wholesaler, it would be like me calling myself a musician who only plays one note. You are more than a mere wholesaler, Ms. Carson; you are a real estate business owner. And I wish you fast success.

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