Networth Realty and 212 Loans

9 Replies

My son and I are in Arizona and we are considering signing up with Networth Reality to possibly do our first deal. Networth seems really convenient by having the property and financing put together and ready to go but a little caution light goes off in my head when things look easy.   Nothing's for free so I'm wondering if the attraction of having homes handed to us without effort isn't paid for by an inflated property price and a higher cost of financing?   We all know that It's expensive and discouraging to learn the hard way so I'd really appreciate anyone's input concerning the properties offered by Networth and their 212 financing, which you are required to use.  I am not implying that anything is wrong with Networth and I'm not criticizing them for wanting to make as much profit as possible, as do I.  Business should be a win/win situation, I just want to know the good and bad experiences of others so we can be reasonably sure before we make any commitment.  In addition f anyone can share any wholesalers or hard money lenders we would really appreciate it.

We have borrowers in multiple markets utilize Net Worth Realty and they can definitely be a good source for deals. Every deal is different, so I always encourage my borrowers to do their own due diligence in addition to utilizing any information provided by NWR. They provide an initial estimate of rehab needed and ARV, but it needs to be vetted by the buyer. If there is a lender involved, there will typically be an appraisal as well. I would say this is typical of any wholesale deal.

In terms of the financing, get with multiple hard money lenders and find the deal that works best for you.  In my experience, they do not force a buyer to use 212.  They are flexible as long as the buyer can close.  

@Salvatore Tardio NWR has a presence in my market  - not to say that it can't work, I just strongly encourage you do your own due diligence on values and repairs. Keeping in mind they have a vested interest in you buying their property and using their financing, it can be a conflict of interest. Shop a few lenders to make sure you are not only getting fair pricing but also someone who can add value to the transaction after it is closed and you are on the hook.

They often want you to move quickly with a none refundable deposit, which makes perfect sense in a competitive market, but is not always conducive to doing your homework.

@Salvatore Tardio I wanted to chime in on what @Jon S. said. As a Networth associate we do not require you to use 212 loans for financing, although as you mentioned it can be more convenient at times because of how quick the deals move and how fast 212 can close. As stated here already as long as the lender you are using can close on time (Typically less than a week) then there are no issues. I'm sure the associate you are working with can attest to that and answer any other questions you may have.

Again, I strongly encourage you to do your homework on the deals and verify that our ARVs/numbers make sense. The deals do move fast but there should be enough time to check comps, and you can always have your GC meet you at the property as well to verify rehab. numbers.

Good luck on doing your first deal!

Thank you, everyone, for your input.   I made an unusual request of my Networth associate to speak with a couple of their clients and he was able to make that arrangement.   I didn't want to speak with seasoned investors because I can better relate to clients that are new to the process.  Fortunately, both clients were new to Networth but had already completed some deals and also, fortunately, their experiences addressed my concerns.  Based on our conversations we believe Networth is true to their promises but obviously, as always our due diligence is foremost regardless of their presentation.  We hope to start our first deal soon. 

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Originally posted by @Dustin Posey :

@Salvatore Tardio I wanted to chime in on what @Jon S. said. As a Networth associate we do not require you to use 212 loans for financing, although as you mentioned it can be more convenient at times because of how quick the deals move and how fast 212 can close. As stated here already as long as the lender you are using can close on time (Typically less than a week) then there are no issues. I'm sure the associate you are working with can attest to that and answer any other questions you may have.

Again, I strongly encourage you to do your homework on the deals and verify that our ARVs/numbers make sense. The deals do move fast but there should be enough time to check comps, and you can always have your GC meet you at the property as well to verify rehab. numbers.

Good luck on doing your first deal!

Hey @Dustin Posey

Could you intro me to someone in the Fort Worth office? I have a rep in Houston and have asked her several times, but she has not responded to me. She also never even sent me a thank you email after I sent her a client who purchased a $350k house off of her. And this was after she forgot to meet me for our initial consultation.  So I'm not too happy with her service. 

Originally posted by @Jon S. :

We have borrowers in multiple markets utilize Net Worth Realty and they can definitely be a good source for deals. Every deal is different, so I always encourage my borrowers to do their own due diligence in addition to utilizing any information provided by NWR. They provide an initial estimate of rehab needed and ARV, but it needs to be vetted by the buyer. If there is a lender involved, there will typically be an appraisal as well. I would say this is typical of any wholesale deal.

In terms of the financing, get with multiple hard money lenders and find the deal that works best for you.  In my experience, they do not force a buyer to use 212.  They are flexible as long as the buyer can close.  

I second your comment.  I went to their Phoenix office last week and sat down for their presentation.  They do not force you to use 212.  It's an option, choose them if you wish, or finance the deal through other vendors.  You must be able to close quickly though.  Conventional financing is not an option.

I've gotten on the list for New Western in my area (similar business model to NetWorth). As a new investor, I've found the experience to be positive overall.

For new investors, it can be a great way to see some deals, learn more about your market, and get some new perspectives.

In general, I'd advise to trust but verify. Do your own analysis on the deals - don't just blindly trust the ARVs and rehab estimates (if you're looking at their rehabs). In my experience, some have been good and accurate, and others have been more questionable (again totally my personal opinion - the deals I've found questionable may work for some people).

I would suggest that you shop rates and terms with several hard money lenders and set yourself up with whomever you feel most comfortable with. It is really hard to find a deal in this market and you would want to have the flexibility to jump on an opportunity wherever it may come from, not limiting yourself to one wholesaler. If you would like a recommendation for a HML, feel free to send me a PM.

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