No Daisy Chains Allowed

[Norberto Villanueva]

Beginners and veterans alike have come to know this as a place where real estate happens for real. A long-time member and living testament to that fact, I have come to love BiggerPockets' quality network of real estate professionals. Nice work, Brandon!

Alas, iBuyers, Zillow, REALTOR.com, Zillow, RentalBeast, NAR v DOJ, wholesaler licensing...IYKYK, a lot has happened in the industry I love, but daisy chains? Here?! None of that, please.

Nothing new, certain wholesaling methods (ahem, Sub-to!) brought significant, shall we say, less-than-desirable change to the game, which have precipitated nothing less than whole licensing requirements in a growing number of states. Witnessing that change in the BP forums, I'm here to stand in front of the freight train.

Obtaining a Wisconsin loan solicitor license in 1997, I've been living in Colorado since 1999. Finishing a short IT career in 2003, I became a licensed real estate broker in 2002 and, investor-focused since 2017, have dealt with a fair share of buyers, sellers, agents, wholesalers, and yahoos. With little delight, I saw a massive change happening (licensing) to the wholesaler’s business model years ago.

Still, I missed a step when recently responding to a "deal" not too far from the neighborhood where I grew up, graduated from high school, and joined the Navy from in the mid-80s. Partly because how great to engineer a virtual 7-figure deal back home 40 years later, but also because it was posted in this coveted space, I asked the wrong question of the poster.

Before explaining, please take a minute to consider, "Are you the contract holder/POC for this deal?" Is it the wrong or right question to ask? The answer? Maybe. A "POC" may or may not be the Seller/contract holder, or their mandate, i.e., the ONLY ones with decision-making authority in any transaction. In this case, fifteen hours after directly asking with no answer other than "you'll have to ask the city", they don't seem to be.

Clearly the “POC” of self-interest, you might be saying, just another yahoo. No big deal. I beg to differ. The first thing I did was canvass my peeps for anyone with the capacity to take something this size down. Finding none, I then reached out to an institutional buyer I work with who is also from that neck of the woods. A lot apprehensive about the neighborhood, if these folks know one thing, it's how to count. Immediately seeing the 8 Cap at a 16% vacancy, they bit, only to discover they'd seen the deal a “year or two before”. Recalling a rent-control situation hampering profitability, they needed to pause until they found out for sure. Needless to say, there is no deal, just crickets and possibly, just another bridge burned, for how many times can you waste a whale's time and get a callback?

Another lesson learned, I'm here to plead, no daisy chains please. Change is fine, even expected, but the last thing we need in this industry is burned bridges and more legislation.