Wholesaler Misrepresented himself

Wholesaler Misrepresented himself

Real Estate Agent · Davenport, FL · Member since 2015 · 45 posts · 6 votes

I am in the midst of dealing with a wholesaler that has left a bad taste in my mouth for the wholesaling business, and am wondering if this is common practice.

A little background:  So, I'm trying to sell my house and move to Central Florida for a job opportunity for my husband. The plan is for us to began a real estate business, with me focusing on it fulltime, and him eventually joining me once we are successful enough to afford it.  

The key to doing all of this is selling my home. It is an inherited home that needs updating.  We initially were selling it to a family friend so that it could stay within the family in a way, but that didn't work.  At this point, we are just interested in selling it quickly, and willing to leave a substantial amount of money on the table to do so, if necessary.  I had started filling out some of the "we buy houses" forms online to see if any investors would make it worthwhile for us.  I got several hits, and chose to go with someone who established themselves as a cash buyer who could close within 2 weeks.  I informed him of the comps in the area, and my knowledge of the property, and we haggled a price that my husband and I felt comfortable with.  I researched him a bit, seeing that he was a flipper and wholesaler.  At the time I was not too familiar with how wholesaling worked, and he had never mentioned wholesaling.  We signed an offer, sight unseen, with a 7 day inspection period.  He said he would be scheduling an inspector the next day.  The next day, he said he would schedule the inspector for early in the week because he wanted to come with him and was stuck in Broward (we are in Miami).  The following day(Saturday), he said his partner was in the area and wanted to take a look at the property. We obliged. On Monday(labor day), I asked when I should expect him and the inspector. He told me he would let me know Tuesday morning.  Tuesday morning, he asked if the inspector could come by at 7pm. I said yes and asked if he was coming also. He informed me he would not be.  Later in the day, he told me another "partner" was in the area and would like to visit the property. Again, we obliged, but I started to become more suspicious. I had already did some digging into his social media presence to see if he had listed our property with his wholesales over the weekend, and found nothing.  The next partner showed up at 5:30pm, and had another woman with her.  We chatted, and they took pictures, and left.  At 7pm, there was a knock on the door, and I assumed it to be the inspector, but it was someone different, someone who I had not been informed to expect.  I asked him if he was "blank", the inspector. He was not. He was another "partner", and mentioned "xyz" wasn't going to make it, but didn't "xyz" tell me that he was coming? No, also, I have no idea who that is. I spoke with "insert cash buyer name". "Oh, yeah. "Xyz" and "cash buyer" work in the same office." We go ahead and let this person view the property, and I check in with "cash buyer" to straighten if and when inspector is coming and who this guy was. He apologizes for his slip up, and not notifying me of the other "partner", says he will check in with the inspector and get back to me.  Inspector shows up. Now, I'm expecting and prepared for a full official home inspection.  This guy looks around the property for less than 10 minutes. He does no more than any of the "partners" do and leaves.  At this point, I'm very nervous about the whole situation, so I start digging again, and find that he has listed the property with his wholesales.  I do a bit of research on wholesaling and find out that there is a practice of putting a property under contract by identifying yourself as a cash buyer, trying to flip it to an end buyer, and then using the inspection period to back out if you can't flip it to an end buyer.  I confront the "cash buyer" with the knowledge that he has listed my property as a wholesale property.  I ask him if he intends to terminate the contract if he can't flip it to an end buyer. I don't want the property tied up unnecessarily as I am looking to move quickly.  His exact response: "Yes I either close on the property myself first or flip to an end buyer. I will know by the end of today so no worries about dragging it any further.  I knew your situation from the beginning that's why I kept the inspection to seven days only.  It's normally 15 days."  I wait until the end day and ask him what the plan is. He says that he has two cash buyers that would like to view the property tomorrow, and then will decide from there.(At least he us finally honest about who these people are)  I ask him if this means he intends to terminate the contract if he can't find an end buyer? His response: "Please give me till tomorrow afternoon I am doing absolutely everything I can to make this work. I know how important it is to you and your family"

I'm wondering if there is any recourse I have at this point.  I will wait and see what he says tomorrow, and maybe we will get lucky, and one of these investors will want the property. However, I don't have faith in that. The deal I made with him is great for an investor.  The money he has tacked on to wholesale it, makes it a little too expensive for an investment opportunity, I feel.  The whole situation has taught me some big lessons, and I'm trying hard to keep my cool.  Is this how it always works? 

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Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
11y

"Wholesaler misrepresented himself."

"Water turned out to be wet."

See this reply in the discussion

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  • Harrison , NJ · Member since 2015 · 33 posts · 23 votes
    11y
    Originally posted by @John Thedford:
    Originally posted by @Paige Clarke:

    @Mark Ferguson @John Thedford

    I agree with Mark in the sense that I don't see the damage? I also feel like the "victimization" aspect to this is not entirely true. There was no hostile, non-permissible, negligent environment under which the contract was formed. 

    I suppose some could argue the fraudulent aspect- but not strongly enough- clearly as wholesaling is a very live and well profession. 

    Thanks for the response though

    What about the felony aspect? Is that relevant or not? If you wish to operate this way in Florida, and you get busted, your argument won't work. It is no different than the "everyone else is doing it" argument often used by those that get caught doing something illegal. Go see the post about getting busted in Ohio for brokering without a license. Same thing. Different state. I read your profile and it states you want to "wholesale" as a strategy. If you can do that morally, AND legally, great. What if you have to compromise on either?  There are hundreds of posts in the "wholesaling" forum from fraudsters (many in Florida) where they state their "inspection period" is expiring and they don't have a buyer. They were not buyers in the first place. They lied and misled the homeowner. Can you defend that as an acceptable way to do business?

     I do not think anyone on here would dub a felony as not relevant. It's just a different practice and I think that the business can be conducted in a way that is both legal and ethical. There are people that conduct business in less than transparent tactics in every business and with those- we all get a lesson in education and make ourselves more savvy. At the end of the day, it's a choice for both parties and if it's mutually beneficial- great, we have a deal. Undoubtedly there are going to be individuals on the spectrum as to whether wholesaling is __________ (fill in the blank). Thank you for making some of us aware of both legalities and food for thought as we continue participating in the RE marketplace. I think that the approach to a contract, negotiation, partnership, deal, or even simple forum conversation such as this is what truly sets someone apart and either builds or destroys credibility. 

    PC

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @John Thedford:
    Originally posted by @Mark Ferguson:
    Originally posted by @John Thedford:

    @Paige Clarketwo simple reasons: read the full thread. This person has victimized the homeowner. I have purchased properties from sellers AFTER they were victimized by fraudsters just like this. It is a felony in the State of Florida to operate in this manner. See chapter 475 Florida statutes. How would YOU feel if some fraudster pulled this on you? Would it be OK?

     Chapter 475 is 36 pages long. Can you be more specific?

    Brokering without a license. @Brian Gibbonsand I sent PM's the other day. He found the relevant section and the possible consequences. It is a felony. We are seeing cease and desist letters being issued. In other cases, fines levied. Can anyone just walk in and list a property in your state without a license? I am certain they cannot. These fraudsters are doing just that under the guise of "buying" the property. I put one under contract on Sunday. We just got our inspection report today. It came back with some unforeseen issues. I emailed the owner and stated we want a 5K concession on sales price or we would have to cancel the contract. We spent money for the inspection! No bogus garbage these fraudsters use! We promptly informed the homeowner of our position. We didn't take people through trying to make a markup after we lied and said we want to buy it.  BTW--the homeowner wants to move forward. Either way, the deal is honest from the start...not full of lies and deceit!  There is an easy way for these types of operators to get legal: get licensed. Of course, that is no guarantee of ethics.

     Please provide the wording in the clause that makes this illegal. You stated it was in chapter 475 and I would love to see the specifics.  

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    11y

    This discussion would make for a very dramatic, spirited, round-table type debate on a podcast.  I wonder if anyone knows a podcast guy? :) 

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @John Thedford:
    Originally posted by @Mark Ferguson:
    Originally posted by @John Thedford:

    @Paige Clarketwo simple reasons: read the full thread. This person has victimized the homeowner. I have purchased properties from sellers AFTER they were victimized by fraudsters just like this. It is a felony in the State of Florida to operate in this manner. See chapter 475 Florida statutes. How would YOU feel if some fraudster pulled this on you? Would it be OK?

     I'm not really sure what damages were done. She had the house under contract for 7 days and it fell through. Same thing could have happened if it was listed. 

    Mark: I partly agree. If she had a LEGITIMATE buyer that had inspections...then chose not to move forward, that would be HONEST dealing. This jerk LIED AND MISLED the seller. Furthermore, they are without a doubt operating as an unlicensed broker. That is a felony in the  state. They had no intention of buying. At what point is lying and deceit OK? It isn't.  As a matter of fact, I purchased a house in 2012 from a seller who kept asking "how do we know we can trust you". I found out why the concern. Another fraudster had pulled the same thing on them as the OP. These frauds aren't reneging on buying a car off the lot, they aren't changing their mind about something they put on layaway at Sears, they are messing with peoples lives, probably the biggest investment they ever will own, and something that often has extreme emotional ties. Why is the practice of real estate so heavily regulated? To protect the public (but you know that)! 

     So you are saying what makes this illegal is the buyers intention of whether he was the end buyer or not? How in the world can you prove what someone's intentions were when they made the contract? Laws and legalities are not based on intentions, but acts. The severity of the punishment may be determined on intention, but not the legality of the act itself. That is what contracts are for. To show what both parties agreed to in writing. The contract had an assignment clause which tells me he had the legal right to assign the contract. Is it legal to have an assignment clause in florida?

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Mark Ferguson  were this gets sticky for this wholesaler turned poster child  is for sure intentions if the state can pop on a website or craigs list and see a track record of the same type of transactions and or sepina tax returns ( I am sure all go wholesalers pay their tax's )  you can see what the intent was.

    As well as there is something called fraudulent inducement to contract.. in other words seller relies on fraudulent statements to go into contract IE this person telling the seller he is a cash buyer and will close.. The phantom partner thing is just a ruse . 

    believe me regulators see through this stuff.  

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark Fergusonassignments are legal. Intent may or may not be criminal. However, marketing and showing the property is a brokering activity unless you are a principal to the transaction. One tactic these frauds are using is having the homeowner sign an agreement stating they give the "buyer" their permission to show, advertise, and market the property. Sounds like a listing agreement doesn't it? They have a "fee" attached....just as a broker has a commission. They are simply using different words and phrases to try and hide the fact they are brokering without a license. The state says this is an activity that requires a license. At the end of the day, we can agree or disagree...whatever. What is going to matter to some is whether they get a cease and desist or criminal charges and / or a fine. To others, such as the OP, what matters is finding a "buyer" whose intention is to buy rather than frauds like the one referred to by the OP. If the OP has everything documented and can provide evidence of her allegations, certainly the "wholesaler" that put it under contract will have the opportunity to defend their actions and the state can choose to pursue or ignore the case.

    p.s.---did you see the thread about getting busted in Ohio? Did you see some of the fines levied? This IS happening here. I was told yesterday that a local paper will be doing a story on unlicensed brokers. I know the source and believe them to be credible. If they do, it might be an interesting read.

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @Jay Hinrichs:

    @Mark Ferguson  were this gets sticky for this wholesaler turned poster child  is for sure intentions if the state can pop on a website or craigs list and see a track record of the same type of transactions and or sepina tax returns ( I am sure all go wholesalers pay their tax's )  you can see what the intent was.

    As well as there is something called fraudulent inducement to contract.. in other words seller relies on fraudulent statements to go into contract IE this person telling the seller he is a cash buyer and will close.. The phantom partner thing is just a ruse . 

    believe me regulators see through this stuff.  

     Okay, but don't their need to be damages for a fraud claim? To me saying I will buy your house for cash and using a contract with an assignment clause states I might buy the house for cash or I will assign the contract to someone who will buy for cash. This is a homevestor which means he has money and probabaly does flip all the time. 

    He probabaly has a track record of flipping and wholesaling. Maybe if he said specifically I personally promise to buy this home with my own cash their could be a case if he really screwed some one over and caused Monear damage. However, how can you prove he said I will personally pay cash versus I will give you a cash offer. Or I will make a cash offer which coupd be perceived as him buying for cash when really just the offer is cash. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Mark Ferguson  your confusing a civil matter with a potential criminal matter,  and usually its just a cease and desist and a small fine like 2500 to 5k.

    the state does not have to prove a monetary loss as they did not lose money.. 

    if the owner of the property choose to sue them then yes they would have to prove damages..

    But the state is just looking for illegal activity and selling real estate without a license is illegal. even if the person made little or no money.

    If we did not need RE license's then you and I would not need to have one .. do all the CRE and try to do the right thing by our clients

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark Ferguson as a licensed broker, at the end of the day, your state regulatory board has the say as to whether any agent or broker in your state violated some statute or rule. Same here in Florida, Texas, Ohio, and every other state. Some states may not have an issue with some questionable practices due to lack of activity and complaints. Other states are taking a more hard stance due to the number of complaints they receive. I talked to the state investigators a couple weeks back and they stated they receive about 500 complaints a month for unlicensed activity. As a licensed agent or broker, we have lots more accountability. A fraudster like the OP mentioned has no license to lose or have suspended. We do. We also have training, more training, required CE classes, most have E&O insurance, etc. We are bound by a code of ethics...and that is one word I fear many "wholesalers" have no idea of its meaning. I am glad to defend the profession, but not actions by some in the profession!

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    So are there any cases or can someone provide that wording of what florida considers unlicensed? 

  • Denver, CO · Member since 2015 · 251 posts · 123 votes
    11y

    Okay, I hate to pipe in here when I am not really experienced in this arena but .@Mark Ferguson, as a realtor I am somewhat surprised that you think in any way, shape or form that it is okay for an unlicensed individual to act as a realtor and have other, unknown potential "buyers" walk through somebody else's house. There is probably a reason why every state I know of insists on a full, federal background check on anyone who wants to become a real estate agent. I know this will tick off people who are trying to wholesale but seriously, whether enforced or not, unless you have the ability and intent to buy a house based on it being a good deal, then you are illegally functioning as a real estate agent. @Jay Hinrichs nailed it on the head when he was working with an associate and remedied the situation by giving him a line of credit to perform.

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark Fergusoncome on man! You are a broker. You know what activities are considered brokering! If not, they are in the statutes.

    We have an MLS...multiple listing service. Why don't "wholesalers" have a WMLS--wholesalers multiple listing service? BECAUSE representing others in real estate transactions, for a fee, is a licensed activity.

    I feel like I am taking a test:) a state licensing exam!

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    guys. Never once have I said what this guy did was right or ethical. I am arguing the legal aspect of this. When he enters into a contract with sellers that can be assigned that gives him more rights than someone trying to bring a buyer and seller together with no license and no contract. If there was no contract than yes absolutely he is acting as a agent and breaking the law.  Just because we want it to be illegal does not make it so. So far I have not seen any proof or any wording from florida law regarding what is considered practicing without a license when a buyer has a contract on the house. 

    If someone could state some cases or show examples of people being punished I would love to see them. 

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark Ferguson

    from DBPR website:

    The Department is running similar educational campaigns to educate Floridians about the importance of hiring licensed real estate professionals and licensed certified public accountants. Last fiscal year, the Department received 1,376 legally sufficient complaints about unlicensed real estate or unlicensed appraisal activity and 68 legally sufficient complaints about unlicensed certified public accounting activity. These industries have the highest number of unlicensed activity complaints out of the professions regulated by the Department.

    Unlicensed activity occurs when an individual offers to perform or performs services that require a state license and the individual does not hold the required license. Florida law sets specific rules and guidelines for obtaining professional licensure, and the people who have met these requirements are held to professional standards. Consumers can verify professional licenses online at www.myfloridalicense.com.

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    This guy is a homevestor which means he spends 5k to 10k a month in marketing. I bet he had the ability to buy if he wanted to. Plus what if someone is partnering with another investor? 

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @John Thedford:

    @Mark Ferguson

    from DBPR website:

    The Department is running similar educational campaigns to educate Floridians about the importance of hiring licensed real estate professionals and licensed certified public accountants. Last fiscal year, the Department received 1,376 legally sufficient complaints about unlicensed real estate or unlicensed appraisal activity and 68 legally sufficient complaints about unlicensed certified public accounting activity. These industries have the highest number of unlicensed activity complaints out of the professions regulated by the Department.

    Unlicensed activity occurs when an individual offers to perform or performs services that require a state license and the individual does not hold the required license. Florida law sets specific rules and guidelines for obtaining professional licensure, and the people who have met these requirements are held to professional standards. Consumers can verify professional licenses online at www.myfloridalicense.com.

     That mentions nothing about contracts on houses and how the law applies in that case. 

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y
    Originally posted by @Mark Ferguson:

    guys. Never once have I said what this guy did was right or ethical. I am arguing the legal aspect of this. When he enters into a contract with sellers that can be assigned that gives him more rights than someone trying to bring a buyer and seller together with no license and no contract. If there was no contract than yes absolutely he is acting as a agent and breaking the law.  Just because we want it to be illegal does not make it so. So far I have not seen any proof or any wording from florida law regarding what is considered practicing without a license when a buyer has a contract on the house. 

    If someone could state some cases or show examples of people being punished I would love to see them. 

    I am not a lawyer...and not pretending to be one! I can tell you, without a doubt, that people ARE being pursued for the same actions this fraud did against the OP. Whether we agree with it or not, it does not matter. The state has the ability, and apparently the determination, to go after these operators. As I posted earlier, Ohio did as well. There is an extensive thread on BP about illegal brokering in Ohio. You can also look to the state website www.myfloridalicense.com and check on unlicensed activity complaints. There is also a link to see what the results were. The complaint may have not been legally sufficient or may have been legally sufficient. The website shows where fines were levied and other actions. What one person calls "wholesaling" might be called "unlicensed brokering" by the state. I may consider something illegal and the state may not...or vice versa. Their opinion has the full weight of the State of Florida government behind it. If you want to argue the legalities, I am sure you can find lots of attorneys on BP that will be glad to charge you $400 an hour for their opinion:)

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark FergusonFWIW...when I talked to the state a couple weeks back they gave an opinion. It was a verbal opinion..so I can only state what I was told. Their opinion was: people that tie up houses with contracts and then attempt to MARKET THE HOUSE are brokering. Marketing the contract is not a licensed activity. Marketing a property, for another, is!  That is the best I can explain it.

  • Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @John Thedford:

    @Mark FergusonFWIW...when I talked to the state a couple weeks back they gave an opinion. It was a verbal opinion..so I can only state what I was told. Their opinion was: people that tie up houses with contracts and then attempt to MARKET THE HOUSE are brokering. Marketing the contract is not a licensed activity. Marketing a property, for another, is!  That is the best I can explain it.

     So what is marketing? Most of the good wholesalers send an email out to their list that is not public. If someone is advertising a house they have under contract as for sale with an address and price on Craigslist or somewhere public I would agree with you. 

  • Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
    11y

    @Mark Ferguson

    I love your posts Mark, on and off this board.


    https://www.dropbox.com/s/sk583hrkh9mfjsy/Florida%20RE%20Agent%20law.docx?dl=0

    Florida legislation

    Criminal penalties are there

    There is a good reason Ron LeGrand is advocating getting a license (or having a licensed Broker in your LLC or Corp) for assignments of any kind in Florida. Criminal penalties.

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    11y

    @Mark Fergusoncontact the state for their opinion...bed time for me. Real estate deals working tomorrow:)

  • Real Estate Agent · Davenport, FL · Member since 2015 · 45 posts · 6 votes
    11y
    Originally posted by @Mark Ferguson:
    Originally posted by @John Thedford:

    @Mark FergusonFWIW...when I talked to the state a couple weeks back they gave an opinion. It was a verbal opinion..so I can only state what I was told. Their opinion was: people that tie up houses with contracts and then attempt to MARKET THE HOUSE are brokering. Marketing the contract is not a licensed activity. Marketing a property, for another, is!  That is the best I can explain it.

     So what is marketing? Most of the good wholesalers send an email out to their list that is not public. If someone is advertising a house they have under contract as for sale with an address and price on Craigslist or somewhere public I would agree with you. 

     He had a link to his list with my property WITH MY ADDRESS PUBLICLY AVAILABLE on his company facebook. That us how I got a hold of it the first time. 

    Also, is there any determining factors in getting on an email list?  I signed up through his website, and had it in my inbox with 24 hours.  This is also how I've gotten a few other lists, no vetting process.   

  • Real Estate Agent · Davenport, FL · Member since 2015 · 45 posts · 6 votes
    11y
    Originally posted by @Wayne Brooks:

    @Zeak Hill My refusal to work with wholesalers doesn't come from not understanding wholesaling, but rather understanding it very well. Two reasons I don't deal with wholesalers on listed properties; 1) they have to get the property under contract for significantly less than FMV in order to flip it to an investor, and my job is to get the best price for the seller, or 2) If the wholesaler contracts at near FMV, then he's not going to be able to flip it to an investor who wants a "deal", so he simply walks. Perhaps I'm more sensitive to it since I dealt with many short sales, and the last thing I'm going to do is let a wholesaler tie it up for 90 days, then walk, and my seller is 90 days closer to a Foreclosure auction. Texas is odd in that their standard contract has an option period built in.

     Pretty sure number two is EXACTLY what happened.  We made a sufficient deal, as I thought I was selling to a cash buyer who had whatever intention they had with the property.   There was definitely NOT enough room to mark it up and still flip it to another investor.  On top of the fact that  I found out that he was not only wholesaling it, but he had other wholesalers listing it at a significantly higher price than his mark up.  I was recently told this is called a "daisy chain".  

    Who knows if any of those "partners" came through my property genuinely interested, but not at these significant markups....

  • Real Estate Agent · Davenport, FL · Member since 2015 · 45 posts · 6 votes
    11y
    Originally posted by @Zeak Hill:

    @Wayne Brooks I don't blame you I wouldn't accept any kind of buyer who wants to close on a residential home in 90 days, 30 days maybe. I don't know of any wholesalers who would try to get a contract on a house for 90 days. Most wholesalers attempt 30 days or less with advertisements that say quick closing. So, it looks like you don't work with wholesalers at all based upon what you said ? Most wholesalers will offer you a wholesale price what most of you realtors call "low ball". 

    The bottom line is the seller got educated after she signed a contract with the wholesaler and continued to work with him for the several days after she fully understood what he was doing including letting his potential buyers view the property. The majority of wholesalers I know operate in this same fashion and the seller will find this out when she gets in the game. Only thing I have a problem with is that he may have not been polished enough to know his numbers and repair costs along with the prices other investors are willing to pay in certain locations.  So he wasn't able to sell the house in the end of 7 days, hopefully some earnest money was collected to compensate for those 7 days ? If not then make sure next time around.

    The other fact is realtor's buyers have option periods and in Texas you pay an option fee for this but it can be waived or negotiated by the seller / buyer if they don't like it. Also realtor's buyers mostly come with bank financing that takes 30 days or longer which that can fall through at the end and repeat itself with another buyer if you are really unlucky. I know you seen this happen and happens quite often.

    Therefore, lets not make wholesaling seem fraudulent and pretend that working with a realtor / broker is better or faster way to sell a house. In some instances it is an advantage like the market we are in Texas not sure about Florida. It still depends on the condition of the property and price.

    Most realtors I know like to tie up a listing for 6 months are more, is that right ? Watch out for that if this seller decides to go with a realtor / broker.

    One good advice that I saw was someone said that if she was willing to sell at a heavily discounted price then she should be able to do it herself if the price is right.

    Don't do it through a realtor unless you negotiate their listing fee but you still have to come off that 3% for the buyers agent fee so you will be out of 5% or more. Since your dad is realtor he can do it for free. Isn't that what most of us do for our kids..LOL. Here in Texas we have what you call discounted realtors were you pay a fee up front light $500 - $700 & you pay the 3% to the buyers agent.

    You can also call the wholesaler back and ask him why none of his buyers was interested in buying the property. If you get this information this may help you sell it faster if you can eliminate the obstacle.

     Did I have a choice to work with him or not if I was under contract and he would not answer whether or not he intended to close on the property himself, even if he could not find an end buyer?  I let one more person visit the property in hopes that it would work out for us anyways, and because he would not answer me directly, and I was pressuring him for an answer.  

    I know exactly why none of his buyers were interested in the property.  The deal we made did not leave room for a wholesale markup of $12000, plus another mark up if $5000-$10000 for anyone that he had re-wholesaling (I don't know what to actually call this, so if that isn't a word, let's just pretend it is.).  I'm almost sure he didn't research the property and just put me under contract on the chance he could flip it.  He never even visited the property, instead repeatedly telling me he was tied up in Broward, but could this and that "partner" come check it out.  

    Like I said before,  I wasn't necessarily intending to sell at a heavily discounted price.  I was just researching what these places might offer, and I received a good offer, or so I thought.  

  • Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    11y
    Originally posted by @Mark Ferguson:
    Originally posted by @Brent Coombs:

    @Mark Ferguson, by saying "if she sells at full arv minus repairs that is not a discount", I totally agree. (But so what)? ... @Nikki Harmon is well within her rights to find out what the REAL market value is, by asking the market to pay full AS-IS value...

    I don't mind the suggestion put by @Jay Hinrichs for Nikki to put in the funds necessary to reach ARV...

    One of the fundamentals of real estate is that when a home needs repairs it will sell for a discount. No one likes to make repairs just for the fun of it to break even. 

    Arv minus repairs does not equal as is value. As is value is determined by the market which considers how many repairs, how much they are, how long it will take, what similar houses have sold for and what fixed up houses sell for. If ARV is 300k and 20k in repairs are needed the as is value could be 270k, 250k or 230k depending on the market and the repairs.

    It is almost always a good idea to make repairs before you list it if able. Why do you think flippers fix up houses? 

    Yes, but Flippers do sometimes get it wrong! In any case, when I suggested Nikki sell it for full as-is value, I didn't necessarily mean for as much as ARV - R. I meant for as much the market will bear (real market value). I was already aware of Nikki's ARV - R point when she said: "The ARV minus repairs question wasn't in reference to my own property. I was thinking in terms of buying buy and holds in the future with strong cash flow".

    As for the legality or otherwise of what this fellow was doing, I am waiting to see who is going to start the new thread: BUSTED IN TEXAS FOR PRACTICING RE WITHOUT A LICENSE, complete with quoted Regulations and cautionary tales, like Ohio has already established. Cheers...

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