Do investors really hate being cold called?
Real Estate Agent · Orange County · Member since 2025 · 7 posts · 7 votes
Do investors really hate being cold called?
Most Popular Reply
Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votesMy phone rings 10+ times per day with garbage calls, some asking to buy properties I haven't owned in well over a decade.
Texting me spam is an immediate addition to my blocked numbers list and spammers often receive a colorful emoji as a reply before they are blocked. Texting is too intrusive. I block callers regularly and have more phone numbers in my blocked list than my contacts
My email fills up with spam created by AI agents that found my LinkedIn profile and used a database to grab my email. (I de-contented my LinkedIn profile as a result.) I've had proposals to do my bookkeeping, generate more leads, buy my business, buy my properties, loan me money, etc. etc. It gets annoying.
Best thing that works for me is make it easy for me to find you when I'm looking.
91 Replies
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
My phone rings 10+ times per day with garbage calls, some asking to buy properties I haven't owned in well over a decade.
Texting me spam is an immediate addition to my blocked numbers list and spammers often receive a colorful emoji as a reply before they are blocked. Texting is too intrusive. I block callers regularly and have more phone numbers in my blocked list than my contacts
My email fills up with spam created by AI agents that found my LinkedIn profile and used a database to grab my email. (I de-contented my LinkedIn profile as a result.) I've had proposals to do my bookkeeping, generate more leads, buy my business, buy my properties, loan me money, etc. etc. It gets annoying.
Best thing that works for me is make it easy for me to find you when I'm looking.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Greg Scott:
My phone rings 10+ times per day with garbage calls, some asking to buy properties I haven't owned in well over a decade.
Texting me spam is an immediate addition to my blocked numbers list and spammers often receive a colorful emoji as a reply before they are blocked. Texting is too intrusive. I block callers regularly and have more phone numbers in my blocked list than my contacts
My email fills up with spam created by AI agents that found my LinkedIn profile and used a database to grab my email. (I de-contented my LinkedIn profile as a result.) I've had proposals to do my bookkeeping, generate more leads, buy my business, buy my properties, loan me money, etc. etc. It gets annoying.
Best thing that works for me is make it easy for me to find you when I'm looking.
I totally get your frustration. My phone rings with the same types of annoying calls—people trying to buy properties I haven't owned in years, offering services I don't need, or pitching products I’ve never heard of. It's a pain, and like you, I block numbers as soon as I get a spam call.
That being said, as long as businesses are trying to reach people who might be interested in their services or products, cold calls will remain a part of the landscape. It’s just a reality. Businesses don’t always have the budget for major advertising campaigns on prime time TV or clairvoyant skills to target individuals who need them, so they often rely on cold calls to cast a wide net. Sure, it's not ideal, but it's one of the few cost-effective ways they can try to connect with potential customers.
Texting is a whole different ball game. There are serious TCPA implications for sending cold texts and relatively few do it since new regulations and laws went into effect post COVID.
- Rental Property Investor · New Braunfels, TX · Member since 2022 · 408 posts · 408 votes1y
All of the cold calls I get want to buy my properties for 50% of what they’re worth🥴That’s why I don’t answer my phone unless I know who it is anymore…
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes1y
EVERYBODY hates being bothered by cold calls .
What " great value " do you bring ? What is " great value " ?
If you had a great deal , all you have to do is put it on the MLS and its gone that day .
The easiest way to never have me as a customer is to cold call me .
- Real Estate Agent · Orange County · Member since 2025 · 7 posts · 7 votes1y
Totally get it — cold calls aren't anyone's favorite. We don't post listings on MLS, usually investors find most vaue on off market deals and the best investors I work with grab solid flips or rentals before they go public.
So how do you know someone has a great marketplace if they don't get the chance to pitch?
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Quote from @S Arely Cavazos Serratos:
Totally get it — cold calls aren't anyone's favorite. We don't post listings on MLS, usually investors find most vaue on off market deals and the best investors I work with grab solid flips or rentals before they go public.
So how do you know someone has a great marketplace if they don't get the chance to pitch?
The short answer is that companies or people who have a “great” product or service , (and I mean a truly great one, not a salesperson”hyped up” belief that their marginally better than average product/service is “great”), DON’T market, sell, cold call or try to contact potential customers in any way. Because their product/service is in such demand that they need to turn away/limit customers because they’ve chosen to limit the production of their product/service in order to keep it “great”.
The rest of us need to find or uncover customers to continue to have business success. My experience has been that the MORE INTRUSIVE the marketing, the LESS OUTSTANDING the product or service being sold. - 1yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votesWouldn't your pitch be on a platform like the MLS?
Quote from @S Arely Cavazos Serratos:
Totally get it — cold calls aren't anyone's favorite. We don't post listings on MLS, usually investors find most vaue on off market deals and the best investors I work with grab solid flips or rentals before they go public.
So how do you know someone has a great marketplace if they don't get the chance to pitch?
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @V.G Jason:
Wouldn't your pitch be on a platform like the MLS?Quote from @S Arely Cavazos Serratos:
Totally get it — cold calls aren't anyone's favorite. We don't post listings on MLS, usually investors find most vaue on off market deals and the best investors I work with grab solid flips or rentals before they go public.
So how do you know someone has a great marketplace if they don't get the chance to pitch?
It'd be a huge disservice to the seller that hired a listing agent for that agent not to put the property on the MLS. How in the hell can a seller expect to get the best price if the agent doesn't expose the property to as many eyeballs as possible.
- Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes1y
Yes, I hate it.
Cold calling may work with desperate and uninformed homeowners. Investors are rarely both. Investors generally know (or should know) their property value and aren't going to give it away, which is the only way wholesaling works. I would think it stands a better chance with owner occupants and estates versus investors.
I get at least 2-3 per week "I'll buy your house for cash and you don't have to do anything." type postal mails, emails, texts and phone calls. What would make yours stand out? The whole strategy is based on blasting out high volume offers and catching the small percentage of responses that comes back as potential leads without being concerned about who you annoy in the process.
- 1yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @James Mc Ree:
Yes, I hate it.
Cold calling may work with desperate and uninformed homeowners. Investors are rarely both. Investors generally know (or should know) their property value and aren't going to give it away, which is the only way wholesaling works. I would think it stands a better chance with owner occupants and estates versus investors.
I get at least 2-3 per week "I'll buy your house for cash and you don't have to do anything." type postal mails, emails, texts and phone calls. What would make yours stand out? The whole strategy is based on blasting out high volume offers and catching the small percentage of responses that comes back as potential leads without being concerned about who you annoy in the process.
Actually, a lot of solid deals are from investor's running out of rehab funds and facing potential foreclosure because they can't refi or sell on the MLS.
You also have homeowners that lost their job and can't make the mortgage payment. Listing on the MLS is not an option.
And lastly you have the people that have un-permitted additions, very poor condition houses that won't pass an appraisal or traditional financing.
While you might not be in these situations, a lot of other people might be. I don't think a wholesaler is robbing anyone's equity if they don't have the time or resources to list on the open market.
LuxePrivate Investments LLC 572 Reviews
- 1yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
It's a numbers game. For every 100 calls, you might get 1 qualified lead. You are better putting your effort in social media marketing, and networking.
It does work, but only if you are highly targeted and specific in your calls.
LuxePrivate Investments LLC 572 Reviews- Member since 2024 · 153 posts · 67 votes1y
Quote from @Erik Estrada:
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
It's a numbers game. For every 100 calls, you might get 1 qualified lead. You are better putting your effort in social media marketing, and networking.
It does work, but only if you are highly targeted and specific in your calls.
That's a good rate. My VA rings 1200 numbers a day using multi-line dialers. Our contact rate is 4%. Which sucks. And we hardly get a lead per day. While we need at least 2-30 leads to close a deal. Sometimes I think using Google voice with manual dial would yield better results, due to much higher connection rate.
I would ultimately scale up to 12000 dials a day and hire 10 VA's if I could increase our contact rate to 10-20%. It's a numbers game and you have to hit thousands of people to find ones who are motivated and willing to close in less than a month.
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
Quote from @Eric N.:
Quote from @Erik Estrada:
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
It's a numbers game. For every 100 calls, you might get 1 qualified lead. You are better putting your effort in social media marketing, and networking.
It does work, but only if you are highly targeted and specific in your calls.
That's a good rate. My VA rings 1200 numbers a day using multi-line dialers. Our contact rate is 4%. Which sucks. And we hardly get a lead per day. While we need at least 2-30 leads to close a deal. Sometimes I think using Google voice with manual dial would yield better results, due to much higher connection rate.
I would ultimately scale up to 12000 dials a day and hire 10 VA's if I could increase our contact rate to 10-20%. It's a numbers game and you have to hit thousands of people to find ones who are motivated and willing to close in less than a month.
Part of the problem out there may be that the databases suck. Just today I got two phone calls for an LLC that we closed in 2017. That LLC owned exactly one SF property in Garland, TX.
What crappy database out there is suggesting that a defunct LLC still owns a property sold 8 years ago!
- Member since 2024 · 153 posts · 67 votes1yYes, a lot of databases suck. I have yet to find a database with high accuracy, and I have tried many, some much more expensive than others. It's not just annoyance to you, as recipient of cold calls, but it's also a waste of time and resources for us. I don't want to contact anyone outside of my target audience. If I put a filter "owned more than 4 years", "has equity in excess of 40%" and "exclude LLC/Inc's", I don't want to talk to the owner of LLC who already bought and rehabbed that property from the former owner, and may have even sold it to someone else. But we do get those all the time, mixed up with the rest of the data. I don't know where data providers get their information, but clearly they don't have a quality control and have ton of outdated information sold to clients. The only thing we can do on our end is mark those prospects as DNC in our own database and avoid calling those numbers ever again.
Quote from @Greg Scott:
Quote from @Eric N.:
Quote from @Erik Estrada:
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
It's a numbers game. For every 100 calls, you might get 1 qualified lead. You are better putting your effort in social media marketing, and networking.
It does work, but only if you are highly targeted and specific in your calls.
That's a good rate. My VA rings 1200 numbers a day using multi-line dialers. Our contact rate is 4%. Which sucks. And we hardly get a lead per day. While we need at least 2-30 leads to close a deal. Sometimes I think using Google voice with manual dial would yield better results, due to much higher connection rate.
I would ultimately scale up to 12000 dials a day and hire 10 VA's if I could increase our contact rate to 10-20%. It's a numbers game and you have to hit thousands of people to find ones who are motivated and willing to close in less than a month.
Part of the problem out there may be that the databases suck. Just today I got two phone calls for an LLC that we closed in 2017. That LLC owned exactly one SF property in Garland, TX.
What crappy database out there is suggesting that a defunct LLC still owns a property sold 8 years ago!
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes1y
Exactly. I sold a community of quads in '22. Most held in an LLC, but 1 owned personally.
The LLC never got/gets bothered but the 1 does. List buyers look like they exclude owned in an entity. Fun fact.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Steve Vaughan:
Exactly. I sold a community of quads in '22. Most held in an LLC, but 1 owned personally.
The LLC never got/gets bothered but the 1 does. List buyers look like they exclude owned in an entity. Fun fact.
There are some who do commercials and pursue entity owned properties. But most, myself included, exclude them. We still get mixed up data, because data vendors don't have 100% accurate information on all properties. And whenever we inadvertently hit an LLC/inc. or trust, i know it's a waste of time for us. I personally don't want to call another investor like me and ask if they will sell me property at profitable to me price. I can't fathom why the other investor who has the said property can't do what I can do, finance rehab and increase rent, or hire prop manager (if it is in half decent shape) to run it for him. The highest odds to get a deal, of course, would be that the commercial property owner you speak with is in some serious financial distress, might be hit with series of code violations, back taxes and suffers consequences of major mismanagement of finances and negligence, and all the while is unaware of the options to get himself out of the situation as an investor. Yes, those situations are possible, but odds are stacked against us. So, in our company we really try to avoid entities when we do cold calling.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear. - Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread.. - Member since 2024 · 153 posts · 67 votes1yI do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :D
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread.. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
they are aware I just have a program that is very unique and it piques their interest and its not like normal HML everyone knows about that.. I do things others wont so I earn the bizz that way.. - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box. - Member since 2024 · 153 posts · 67 votes1yI will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box? - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well - Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read. - Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Eric N.:
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
- Member since 2024 · 153 posts · 67 votes1y
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Quote from @Eric N.:
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Quote from @Eric N.:
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Quote from @Eric N.:
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Quote from @Eric N.:
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
Quote from @Eric N.:
I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Jay Hinrichs I actually made a lot of money from ABC Capital. I foreclosed on a lot of their deals that went bad.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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@Jay Hinrichs I actually made a lot of money from ABC Capital. I foreclosed on a lot of their deals that went bad.
as did I and I got a 200k judgement against him personally I think the only one to date that has won in court.. I have my doubts that I will collect and that was just for what we call bonus's to us above our normal fees but they were owed and not paid.. It was wild there for a time.. getting settlment statesments that had my sig forged and the funds going directly from Isreal investor to ABC on property that I OWNED LOL - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
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I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
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@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
Ok, so here's a simple question.
Does the states you operate in have licensing for real estate agents?
How does it define real estate agents?
It defines them, what they do, as pairing seller with buyer, correct.
You have defined what you do as pairing seller with buyer.
You have 0 intent of ever taking ownership, and of getting a buyer to reassign it over for a profit. Definitively pairing seller with buyer for a commission.
And i bet those states have a legal requirement that people doing such, pairing seller with buyer for a commission, MUST be licensed.
So at foundational fundamental level, what you do IS deceptive.
You actively engaging in a work-around to the prevailing laws and standards long LONG established.
And in truth are simply upset over the closing of those loop-holes and work arounds.
Now as for any nefarious league of power elites rubbing there hands to close off some "threat" of wholesalers, that's laughable.
Because it lacks the entire component of being a "threat". Wholesalers in no way shape or form are any kind of "threat" to the licensed real estate industry. FULL-STOP.
Wholesalers are not taking any significant market share, nor growing in market share. I'd be shocked if wholesalers account for as-much-as 1% of transactions. I am sure it's a fraction there of.
Reality is, wholesalers have 100% done it to themself. And the surge of BS from such, well the policing powers that be simply have had enough and said fine, gonna shut that BS down.
Because reality is not 1 seller or buyer NEEDS a wholesaler. There is a ready plethora of legal, licensed, regulated solution providers. Wholesalers are scalpers. They were allowed to exist as long as they didn't make too much trouble. Well, now it's made too much trouble so now your gonna be held to a standard.
If being held to a standard is too much "authoritarianism" how about you go get speed limits eliminated for roads, same difference.
The bar is being set so low for wholesalers to operate legally it's ridiculous to argue it.
- Member since 2024 · 153 posts · 67 votes1y
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
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I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
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@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
Ok, so here's a simple question.
Does the states you operate in have licensing for real estate agents?
How does it define real estate agents?
It defines them, what they do, as pairing seller with buyer, correct.
You have defined what you do as pairing seller with buyer.
You have 0 intent of ever taking ownership, and of getting a buyer to reassign it over for a profit. Definitively pairing seller with buyer for a commission.
And i bet those states have a legal requirement that people doing such, pairing seller with buyer for a commission, MUST be licensed.
So at foundational fundamental level, what you do IS deceptive.
You actively engaging in a work-around to the prevailing laws and standards long LONG established.
And in truth are simply upset over the closing of those loop-holes and work arounds.
Now as for any nefarious league of power elites rubbing there hands to close off some "threat" of wholesalers, that's laughable.
Because it lacks the entire component of being a "threat". Wholesalers in no way shape or form are any kind of "threat" to the licensed real estate industry. FULL-STOP.
Wholesalers are not taking any significant market share, nor growing in market share. I'd be shocked if wholesalers account for as-much-as 1% of transactions. I am sure it's a fraction there of.
Reality is, wholesalers have 100% done it to themself. And the surge of BS from such, well the policing powers that be simply have had enough and said fine, gonna shut that BS down.
Because reality is not 1 seller or buyer NEEDS a wholesaler. There is a ready plethora of legal, licensed, regulated solution providers. Wholesalers are scalpers. They were allowed to exist as long as they didn't make too much trouble. Well, now it's made too much trouble so now your gonna be held to a standard.
If being held to a standard is too much "authoritarianism" how about you go get speed limits eliminated for roads, same difference.
The bar is being set so low for wholesalers to operate legally it's ridiculous to argue it.
In my state, it’s fully legal to do contract assignment, and I assure you of that. People often call it “wholesaling”, but that’s just a folksy term used to describe what is, in the business world, simply contract assignment. This practice is as old as Roman law*. Outlawing it is unconstitutional. Sooner or later, someone will challenge these new laws all the way to the Supreme Court, and we’ll see what the highest court says. Until then, I’ll steer clear of those socialist-inspired and de facto oligarchy-run jurisdictions.
It’s none of my concern how my state defines and regulates agents, because I’m not one. I’m only concerned with my own business.
As for me, I’ve never defined myself as “pairing” a seller with a buyer. If anything, my PSA clearly states that I am a principal, not an agent, broker, or anyone working on someone else’s behalf and earning commissions that come with fiduciary duties.
If you’re curious about the status, obligations, and duties of real estate agents, feel free to contact one of the National Association of Realtors (NAR) associations or check the existing legislative laws. But as I’ve said, it’s none of my concern what they’re doing or how they’re defined.
You’re misinforming members of this forum if you claim that licensing is required in my state to assign a real estate contract. I know some corrupt state legislatures in bed with big money have passed laws outlawing contract assignment in other states, but that’s not the case where I operate. So, why mislead the public? If you don’t know the laws in my state, don’t deceive the public and don't make up things that aren’t in the books.
You say no seller “needs” a wholesaler? Fine. Provided we’re not talking about someone mentally incapacitated, sellers are free to refuse dealing with wholesalers and go find their own buyers. I never tell sellers they need me. In fact, I often suggest they go list their property on the MLS and wait 60 to 180 days to close, so they can get the top offer they want. But good luck selling a dilapidated house with a broken toilet and leaking roof when the market is flooded with new listings and days on market are longer than ever in the post COVID years. Btw, I don’t want to be involved with sellers who want to sell directly or hire an agent as a matter of principle; that’s their choice. It’s a free country.
It seems you’re angry with wholesalers (or "contract assigners," to be precise). Maybe you’ve lost too many sellers to them, and it pains you that someone found a more productive way to do business than you. So, you want the state to impose its power using socialist rhetoric to fool the masses and secure a monopoly for you. Like I said, I stay away from states where the big money pretending to be caring for poor (while making them poor and destitute by economic policies geared to serve solely big corporate interests) have outlawed contract assignment, but we’ll see how this plays out when someone gets fed up and is resourceful enough to take it all the way to SCOTUS and challenge the constitutionality of laws passed by these corrupt state legislators selling their offices to the highest bidder in exchange for campaign contributions and perks.
Contract Assignment: Definition & Overview
Contract assignment is the process by which one party (the assignor) transfers their rights or obligations under a contract to another party (the assignee). In this context, it’s important to note that there are two types of assignments:
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Assignment of Rights: When a party transfers its rights under the contract to someone else (for example, the right to receive payment).
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Delegation of Duties: When a party transfers their duties or obligations under the contract to another party (for example, the obligation to perform services).
In most cases, assignments happen with the consent of all parties involved, especially if the contract contains a specific clause requiring consent for assignments.
History of Contract Assignment
The practice of contract assignment dates back to Roman law, where the concept of cessio (assignment of rights) was already in place. Roman legal principles influenced modern Western legal systems, particularly those in Europe and the United States.
In American legal history, contract law developed alongside the growth of business and commerce. During the 19th century, as the economy expanded, businesses needed mechanisms for more flexible arrangements—assignments helped meet this need by allowing companies to transfer obligations or benefits to other entities, facilitating mergers, acquisitions, and other corporate restructuring processes.
Initially, the legal principle surrounding contract assignments was more rigid. The enforceability of an assignment depended on whether the contract was assignable in the first place. In modern law, however, the freedom of assignment has become more prominent, though some restrictions remain in certain areas.
Contract Assignment in U.S. Business
In the United States, contract assignments are common in business, particularly in industries such as real estate, construction, finance, and intellectual property. However, the specifics can vary depending on the nature of the contract and the parties involved.
Examples of Common Practices:-
Real Estate: In real estate transactions, assignments of contracts are often used, especially for flipping properties or when a buyer wishes to transfer the rights of their purchase agreement to another party before closing. For instance, if a buyer has secured a contract to purchase a property but cannot follow through with the purchase, they may assign the contract to another buyer for a fee.
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Outsourcing and Subcontracting: In industries such as construction and services, companies often delegate duties or assign their contracts to subcontractors or other third parties.
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Leasing and Financing: Leasing companies may assign lease agreements to other firms, and lenders may assign loans or debts to other financial institutions.
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Intellectual Property: When a company licenses its intellectual property, such as patents, trademarks, or copyrights, it may assign the rights to another party, either temporarily or permanently.
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Mergers and Acquisitions: During mergers and acquisitions, companies frequently assign contracts to streamline the transition of obligations and rights.
Contract assignment is a common practice in American business but is typically subject to the terms of the contract itself. Most contracts contain provisions that either allow or restrict assignment.
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Contracts Without Restrictions: Many contracts in business allow assignments without any specific restrictions. This is especially true for contracts where the subject matter (such as the delivery of goods or services) does not rely heavily on the personal performance of the assignor.
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Contracts With Assignment Clauses: Some contracts, particularly in areas like employment, finance, and partnership agreements, will contain specific clauses requiring written consent from the other party to permit an assignment. In these cases, the assignment process can be more complicated, as consent must be negotiated.
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Contracts That Are Not Assignable: Some contracts are simply not assignable, especially if the performance of one of the parties is central to the agreement. This is often the case in contracts related to personal services (such as an actor’s contract with a film studio), as the identity and skills of the individual are central to the contract’s performance.
Legal and Practical Considerations
When it comes to legal and business implications, the practice of assignment raises several important points:
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Consent: As mentioned, many contracts require that all parties consent to an assignment. If the assignor transfers the rights or obligations without the assignee’s consent, it can result in a breach of contract.
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Risk: Assigning rights or delegating duties in a contract doesn’t necessarily relieve the original party of its obligations. In some cases, an assignor can still remain liable for the performance of the contract, depending on the nature of the assignment and the contract's specific language.
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Notice: In some cases, when a contract is assigned, the assignee must notify the other party in writing about the transfer to ensure that payments, communications, or obligations are properly directed.
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Contract Clarity: It's important that the contract language is clear about whether rights are being assigned or duties are being delegated. Misunderstandings in these areas can lead to disputes over enforcement.
Conclusion
Overall, contract assignment is a well-established practice in American business law and widely used across many industries to facilitate flexibility and the efficient transfer of rights and obligations. However, it's important to note that assignments are governed by the terms set forth in the contract and must adhere to any relevant legal provisions.
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- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
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I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
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@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
Ok, so here's a simple question.
Does the states you operate in have licensing for real estate agents?
How does it define real estate agents?
It defines them, what they do, as pairing seller with buyer, correct.
You have defined what you do as pairing seller with buyer.
You have 0 intent of ever taking ownership, and of getting a buyer to reassign it over for a profit. Definitively pairing seller with buyer for a commission.
And i bet those states have a legal requirement that people doing such, pairing seller with buyer for a commission, MUST be licensed.
So at foundational fundamental level, what you do IS deceptive.
You actively engaging in a work-around to the prevailing laws and standards long LONG established.
And in truth are simply upset over the closing of those loop-holes and work arounds.
Now as for any nefarious league of power elites rubbing there hands to close off some "threat" of wholesalers, that's laughable.
Because it lacks the entire component of being a "threat". Wholesalers in no way shape or form are any kind of "threat" to the licensed real estate industry. FULL-STOP.
Wholesalers are not taking any significant market share, nor growing in market share. I'd be shocked if wholesalers account for as-much-as 1% of transactions. I am sure it's a fraction there of.
Reality is, wholesalers have 100% done it to themself. And the surge of BS from such, well the policing powers that be simply have had enough and said fine, gonna shut that BS down.
Because reality is not 1 seller or buyer NEEDS a wholesaler. There is a ready plethora of legal, licensed, regulated solution providers. Wholesalers are scalpers. They were allowed to exist as long as they didn't make too much trouble. Well, now it's made too much trouble so now your gonna be held to a standard.
If being held to a standard is too much "authoritarianism" how about you go get speed limits eliminated for roads, same difference.
The bar is being set so low for wholesalers to operate legally it's ridiculous to argue it.
In my state, it’s fully legal to do contract assignment, and I assure you of that. People often call it “wholesaling”, but that’s just a folksy term used to describe what is, in the business world, simply contract assignment. This practice is as old as Roman law*. Outlawing it is unconstitutional. Sooner or later, someone will challenge these new laws all the way to the Supreme Court, and we’ll see what the highest court says. Until then, I’ll steer clear of those socialist-inspired and de facto oligarchy-run jurisdictions.
It’s none of my concern how my state defines and regulates agents, because I’m not one. I’m only concerned with my own business.
As for me, I’ve never defined myself as “pairing” a seller with a buyer. If anything, my PSA clearly states that I am a principal, not an agent, broker, or anyone working on someone else’s behalf and earning commissions that come with fiduciary duties.
If you’re curious about the status, obligations, and duties of real estate agents, feel free to contact one of the National Association of Realtors (NAR) associations or check the existing legislative laws. But as I’ve said, it’s none of my concern what they’re doing or how they’re defined.
You’re misinforming members of this forum if you claim that licensing is required in my state to assign a real estate contract. I know some corrupt state legislatures in bed with big money have passed laws outlawing contract assignment in other states, but that’s not the case where I operate. So, why mislead the public? If you don’t know the laws in my state, don’t deceive the public and don't make up things that aren’t in the books.
You say no seller “needs” a wholesaler? Fine. Provided we’re not talking about someone mentally incapacitated, sellers are free to refuse dealing with wholesalers and go find their own buyers. I never tell sellers they need me. In fact, I often suggest they go list their property on the MLS and wait 60 to 180 days to close, so they can get the top offer they want. But good luck selling a dilapidated house with a broken toilet and leaking roof when the market is flooded with new listings and days on market are longer than ever in the post COVID years. Btw, I don’t want to be involved with sellers who want to sell directly or hire an agent as a matter of principle; that’s their choice. It’s a free country.
It seems you’re angry with wholesalers (or "contract assigners," to be precise). Maybe you’ve lost too many sellers to them, and it pains you that someone found a more productive way to do business than you. So, you want the state to impose its power using socialist rhetoric to fool the masses and secure a monopoly for you. Like I said, I stay away from states where the big money pretending to be caring for poor (while making them poor and destitute by economic policies geared to serve solely big corporate interests) have outlawed contract assignment, but we’ll see how this plays out when someone gets fed up and is resourceful enough to take it all the way to SCOTUS and challenge the constitutionality of laws passed by these corrupt state legislators selling their offices to the highest bidder in exchange for campaign contributions and perks.
Contract Assignment: Definition & Overview
Contract assignment is the process by which one party (the assignor) transfers their rights or obligations under a contract to another party (the assignee). In this context, it’s important to note that there are two types of assignments:
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Assignment of Rights: When a party transfers its rights under the contract to someone else (for example, the right to receive payment).
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Delegation of Duties: When a party transfers their duties or obligations under the contract to another party (for example, the obligation to perform services).
In most cases, assignments happen with the consent of all parties involved, especially if the contract contains a specific clause requiring consent for assignments.
History of Contract Assignment
The practice of contract assignment dates back to Roman law, where the concept of cessio (assignment of rights) was already in place. Roman legal principles influenced modern Western legal systems, particularly those in Europe and the United States.
In American legal history, contract law developed alongside the growth of business and commerce. During the 19th century, as the economy expanded, businesses needed mechanisms for more flexible arrangements—assignments helped meet this need by allowing companies to transfer obligations or benefits to other entities, facilitating mergers, acquisitions, and other corporate restructuring processes.
Initially, the legal principle surrounding contract assignments was more rigid. The enforceability of an assignment depended on whether the contract was assignable in the first place. In modern law, however, the freedom of assignment has become more prominent, though some restrictions remain in certain areas.
Contract Assignment in U.S. Business
In the United States, contract assignments are common in business, particularly in industries such as real estate, construction, finance, and intellectual property. However, the specifics can vary depending on the nature of the contract and the parties involved.
Examples of Common Practices:-
Real Estate: In real estate transactions, assignments of contracts are often used, especially for flipping properties or when a buyer wishes to transfer the rights of their purchase agreement to another party before closing. For instance, if a buyer has secured a contract to purchase a property but cannot follow through with the purchase, they may assign the contract to another buyer for a fee.
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Outsourcing and Subcontracting: In industries such as construction and services, companies often delegate duties or assign their contracts to subcontractors or other third parties.
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Leasing and Financing: Leasing companies may assign lease agreements to other firms, and lenders may assign loans or debts to other financial institutions.
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Intellectual Property: When a company licenses its intellectual property, such as patents, trademarks, or copyrights, it may assign the rights to another party, either temporarily or permanently.
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Mergers and Acquisitions: During mergers and acquisitions, companies frequently assign contracts to streamline the transition of obligations and rights.
Contract assignment is a common practice in American business but is typically subject to the terms of the contract itself. Most contracts contain provisions that either allow or restrict assignment.
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Contracts Without Restrictions: Many contracts in business allow assignments without any specific restrictions. This is especially true for contracts where the subject matter (such as the delivery of goods or services) does not rely heavily on the personal performance of the assignor.
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Contracts With Assignment Clauses: Some contracts, particularly in areas like employment, finance, and partnership agreements, will contain specific clauses requiring written consent from the other party to permit an assignment. In these cases, the assignment process can be more complicated, as consent must be negotiated.
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Contracts That Are Not Assignable: Some contracts are simply not assignable, especially if the performance of one of the parties is central to the agreement. This is often the case in contracts related to personal services (such as an actor’s contract with a film studio), as the identity and skills of the individual are central to the contract’s performance.
Legal and Practical Considerations
When it comes to legal and business implications, the practice of assignment raises several important points:
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Consent: As mentioned, many contracts require that all parties consent to an assignment. If the assignor transfers the rights or obligations without the assignee’s consent, it can result in a breach of contract.
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Risk: Assigning rights or delegating duties in a contract doesn’t necessarily relieve the original party of its obligations. In some cases, an assignor can still remain liable for the performance of the contract, depending on the nature of the assignment and the contract's specific language.
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Notice: In some cases, when a contract is assigned, the assignee must notify the other party in writing about the transfer to ensure that payments, communications, or obligations are properly directed.
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Contract Clarity: It's important that the contract language is clear about whether rights are being assigned or duties are being delegated. Misunderstandings in these areas can lead to disputes over enforcement.
Conclusion
Overall, contract assignment is a well-established practice in American business law and widely used across many industries to facilitate flexibility and the efficient transfer of rights and obligations. However, it's important to note that assignments are governed by the terms set forth in the contract and must adhere to any relevant legal provisions.
Your pedantic rambling attesting to superior heights of arrogant ignorance, it's one of those moments like watching a lunatic completely freaking out screaming at the top of there lungs "I'm not angry/crazy"......
Ya know, you didn't even have to do any off page research to have acheived some form of a clue, my title is literally listed with my name (R.E. Broker) and the title "The REI Realtor" should be a dead giveaway, yet you refer me to check with NAR, lol.
Instead of address my very clear points, you respond with spin Spin SPIN, that's a rather clear statement in and of itself.
So yeah, I guess we agree, I put you in check-mate aaaaand your gonna just rely on spin and deception to save your bacon. Ok, you have fun with that.
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- Member since 2024 · 153 posts · 67 votes1y
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I will do brokerage, but right now working with one lender. I won't lend my own money on deals. I have people in my network who do it, that's called PML. There are ways to mitigate risks, by lending 70% of as is value, but I don't like the liability. Set aside competitive disadvantage (flippers can get up to 90% of purchase price if experienced) , even if I had clients willing to borrow at 70% I would still have to deal with foreclosures when they fail. I see flippers fail all the time. Things look viable on paper and pass the scrutiny, but what happens in real life is another thing. Most get screwed by underestimating rehab budget and being ripped off by contractors who take money and procrastinate or just dump them and run away. But if you have large enough capital to lend I guess you can mitigate the risks by writing off bad loans and foreclosure costs as cost of doing business.Quote from @Jay Hinrichs:
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I do that too. I work with the lending company that does HML, bridge and DSCR. Do you mean the wholesalers who reached out to you were so clueless that they were unaware of funding options until you pitched your service to them? If yes, this is amazing. I always feel amazed when I stumble upon successful people who don't know some basic stuff related to their line of business. If they were all newbies, then that's self explanatory. But if these were seasoned wholesalers crushing it locally, and still unaware of asset based financing, then that is amazing. :DQuote from @Jay Hinrichs:
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"So how do you know someone has a great marketplace if they don't get the chance to pitch?"That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as wellGlad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
Ok, so here's a simple question.
Does the states you operate in have licensing for real estate agents?
How does it define real estate agents?
It defines them, what they do, as pairing seller with buyer, correct.
You have defined what you do as pairing seller with buyer.
You have 0 intent of ever taking ownership, and of getting a buyer to reassign it over for a profit. Definitively pairing seller with buyer for a commission.
And i bet those states have a legal requirement that people doing such, pairing seller with buyer for a commission, MUST be licensed.
So at foundational fundamental level, what you do IS deceptive.
You actively engaging in a work-around to the prevailing laws and standards long LONG established.
And in truth are simply upset over the closing of those loop-holes and work arounds.
Now as for any nefarious league of power elites rubbing there hands to close off some "threat" of wholesalers, that's laughable.
Because it lacks the entire component of being a "threat". Wholesalers in no way shape or form are any kind of "threat" to the licensed real estate industry. FULL-STOP.
Wholesalers are not taking any significant market share, nor growing in market share. I'd be shocked if wholesalers account for as-much-as 1% of transactions. I am sure it's a fraction there of.
Reality is, wholesalers have 100% done it to themself. And the surge of BS from such, well the policing powers that be simply have had enough and said fine, gonna shut that BS down.
Because reality is not 1 seller or buyer NEEDS a wholesaler. There is a ready plethora of legal, licensed, regulated solution providers. Wholesalers are scalpers. They were allowed to exist as long as they didn't make too much trouble. Well, now it's made too much trouble so now your gonna be held to a standard.
If being held to a standard is too much "authoritarianism" how about you go get speed limits eliminated for roads, same difference.
The bar is being set so low for wholesalers to operate legally it's ridiculous to argue it.
In my state, it’s fully legal to do contract assignment, and I assure you of that. People often call it “wholesaling”, but that’s just a folksy term used to describe what is, in the business world, simply contract assignment. This practice is as old as Roman law*. Outlawing it is unconstitutional. Sooner or later, someone will challenge these new laws all the way to the Supreme Court, and we’ll see what the highest court says. Until then, I’ll steer clear of those socialist-inspired and de facto oligarchy-run jurisdictions.
It’s none of my concern how my state defines and regulates agents, because I’m not one. I’m only concerned with my own business.
As for me, I’ve never defined myself as “pairing” a seller with a buyer. If anything, my PSA clearly states that I am a principal, not an agent, broker, or anyone working on someone else’s behalf and earning commissions that come with fiduciary duties.
If you’re curious about the status, obligations, and duties of real estate agents, feel free to contact one of the National Association of Realtors (NAR) associations or check the existing legislative laws. But as I’ve said, it’s none of my concern what they’re doing or how they’re defined.
You’re misinforming members of this forum if you claim that licensing is required in my state to assign a real estate contract. I know some corrupt state legislatures in bed with big money have passed laws outlawing contract assignment in other states, but that’s not the case where I operate. So, why mislead the public? If you don’t know the laws in my state, don’t deceive the public and don't make up things that aren’t in the books.
You say no seller “needs” a wholesaler? Fine. Provided we’re not talking about someone mentally incapacitated, sellers are free to refuse dealing with wholesalers and go find their own buyers. I never tell sellers they need me. In fact, I often suggest they go list their property on the MLS and wait 60 to 180 days to close, so they can get the top offer they want. But good luck selling a dilapidated house with a broken toilet and leaking roof when the market is flooded with new listings and days on market are longer than ever in the post COVID years. Btw, I don’t want to be involved with sellers who want to sell directly or hire an agent as a matter of principle; that’s their choice. It’s a free country.
It seems you’re angry with wholesalers (or "contract assigners," to be precise). Maybe you’ve lost too many sellers to them, and it pains you that someone found a more productive way to do business than you. So, you want the state to impose its power using socialist rhetoric to fool the masses and secure a monopoly for you. Like I said, I stay away from states where the big money pretending to be caring for poor (while making them poor and destitute by economic policies geared to serve solely big corporate interests) have outlawed contract assignment, but we’ll see how this plays out when someone gets fed up and is resourceful enough to take it all the way to SCOTUS and challenge the constitutionality of laws passed by these corrupt state legislators selling their offices to the highest bidder in exchange for campaign contributions and perks.
Contract Assignment: Definition & Overview
Contract assignment is the process by which one party (the assignor) transfers their rights or obligations under a contract to another party (the assignee). In this context, it’s important to note that there are two types of assignments:
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Assignment of Rights: When a party transfers its rights under the contract to someone else (for example, the right to receive payment).
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Delegation of Duties: When a party transfers their duties or obligations under the contract to another party (for example, the obligation to perform services).
In most cases, assignments happen with the consent of all parties involved, especially if the contract contains a specific clause requiring consent for assignments.
History of Contract Assignment
The practice of contract assignment dates back to Roman law, where the concept of cessio (assignment of rights) was already in place. Roman legal principles influenced modern Western legal systems, particularly those in Europe and the United States.
In American legal history, contract law developed alongside the growth of business and commerce. During the 19th century, as the economy expanded, businesses needed mechanisms for more flexible arrangements—assignments helped meet this need by allowing companies to transfer obligations or benefits to other entities, facilitating mergers, acquisitions, and other corporate restructuring processes.
Initially, the legal principle surrounding contract assignments was more rigid. The enforceability of an assignment depended on whether the contract was assignable in the first place. In modern law, however, the freedom of assignment has become more prominent, though some restrictions remain in certain areas.
Contract Assignment in U.S. Business
In the United States, contract assignments are common in business, particularly in industries such as real estate, construction, finance, and intellectual property. However, the specifics can vary depending on the nature of the contract and the parties involved.
Examples of Common Practices:-
Real Estate: In real estate transactions, assignments of contracts are often used, especially for flipping properties or when a buyer wishes to transfer the rights of their purchase agreement to another party before closing. For instance, if a buyer has secured a contract to purchase a property but cannot follow through with the purchase, they may assign the contract to another buyer for a fee.
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Outsourcing and Subcontracting: In industries such as construction and services, companies often delegate duties or assign their contracts to subcontractors or other third parties.
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Leasing and Financing: Leasing companies may assign lease agreements to other firms, and lenders may assign loans or debts to other financial institutions.
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Intellectual Property: When a company licenses its intellectual property, such as patents, trademarks, or copyrights, it may assign the rights to another party, either temporarily or permanently.
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Mergers and Acquisitions: During mergers and acquisitions, companies frequently assign contracts to streamline the transition of obligations and rights.
Contract assignment is a common practice in American business but is typically subject to the terms of the contract itself. Most contracts contain provisions that either allow or restrict assignment.
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Contracts Without Restrictions: Many contracts in business allow assignments without any specific restrictions. This is especially true for contracts where the subject matter (such as the delivery of goods or services) does not rely heavily on the personal performance of the assignor.
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Contracts With Assignment Clauses: Some contracts, particularly in areas like employment, finance, and partnership agreements, will contain specific clauses requiring written consent from the other party to permit an assignment. In these cases, the assignment process can be more complicated, as consent must be negotiated.
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Contracts That Are Not Assignable: Some contracts are simply not assignable, especially if the performance of one of the parties is central to the agreement. This is often the case in contracts related to personal services (such as an actor’s contract with a film studio), as the identity and skills of the individual are central to the contract’s performance.
Legal and Practical Considerations
When it comes to legal and business implications, the practice of assignment raises several important points:
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Consent: As mentioned, many contracts require that all parties consent to an assignment. If the assignor transfers the rights or obligations without the assignee’s consent, it can result in a breach of contract.
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Risk: Assigning rights or delegating duties in a contract doesn’t necessarily relieve the original party of its obligations. In some cases, an assignor can still remain liable for the performance of the contract, depending on the nature of the assignment and the contract's specific language.
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Notice: In some cases, when a contract is assigned, the assignee must notify the other party in writing about the transfer to ensure that payments, communications, or obligations are properly directed.
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Contract Clarity: It's important that the contract language is clear about whether rights are being assigned or duties are being delegated. Misunderstandings in these areas can lead to disputes over enforcement.
Conclusion
Overall, contract assignment is a well-established practice in American business law and widely used across many industries to facilitate flexibility and the efficient transfer of rights and obligations. However, it's important to note that assignments are governed by the terms set forth in the contract and must adhere to any relevant legal provisions.
Your pedantic rambling attesting to superior heights of arrogant ignorance, it's one of those moments like watching a lunatic completely freaking out screaming at the top of there lungs "I'm not angry/crazy"......
Ya know, you didn't even have to do any off page research to have acheived some form of a clue, my title is literally listed with my name (R.E. Broker) and the title "The REI Realtor" should be a dead giveaway, yet you refer me to check with NAR, lol.
Instead of address my very clear points, you respond with spin Spin SPIN, that's a rather clear statement in and of itself.
So yeah, I guess we agree, I put you in check-mate aaaaand your gonna just rely on spin and deception to save your bacon. Ok, you have fun with that.
I’ll refrain from commenting on your rambling ad hominems—they don’t deserve to be dignified by my response.
But your role as a broker sheds light on your clear frustration with wholesalers. It seems like you struggle to compete in a fair market, perhaps you are not able to secure clients as a broker, and now your only hope is for state intervention to give you a monopoly on real estate transactions. That explains why you're unable to stay focused on the topic and prefer to resort to hysteria rather than addressing the matter on its merits.
While you continue to stew in resentment, I’ll keep moving forward, wholesaling properties (including in your state, if it’s not outlawed), and securing as many properties as I can. I love assigning contracts. Lack of risk combined with a potential to make decent profit even in lowest priced markets makes it my favorite type of transaction in the real estate.
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- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
Personally, I don’t respond well to cold calls. Even back when I worked a W2 job, I found them intrusive and rarely worth the time. As an active investor now, I get approached frequently — and the volume of unsolicited calls has only made me more selective.
What works better? A warm intro, a thoughtful message with clear value, or seeing someone consistently provide useful content. If I’m interested, I’ll raise my hand. Cold calling feels like asking for commitment without context.
7e investments53 Reviews- Real Estate Agent · Houston, TX · Member since 2025 · 59 posts · 31 votes1y
Quote from @Chris Seveney:
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
Personally, I don’t respond well to cold calls. Even back when I worked a W2 job, I found them intrusive and rarely worth the time. As an active investor now, I get approached frequently — and the volume of unsolicited calls has only made me more selective.
What works better? A warm intro, a thoughtful message with clear value, or seeing someone consistently provide useful content. If I’m interested, I’ll raise my hand. Cold calling feels like asking for commitment without context.
Really appreciate this response and feedback as someone who is new to the industry, looking to build a pipeline and network of investors actively looking for deals. I'm always trying to bring immediate value while focusing on establishing a relationship that is more of a long-term partnership opportunity and not a transactional situation.
I'm definitely looking forward to implementing this perspective and avoiding the cold call where it feels like someone is just asking for a commitment without context.
- Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes1y
@Erik Estrada I get how someone is unable to refi. How are they unable to sell on the MLS? I think any property priced right will sell on the MLS.
A property owner selling to a wholesaler has a buyer pool of 1. The wholesaler is carving out a margin for themselves and their buyer which may be fair for the wholesaler market. It is unfavorable for the property owner when compared to a large public market where 1,000s of potential buyers can see and walk the property and the property owner has the benefit of expert advice from a realtor. I think the commission will be less than the wholesaler's carve out.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @James Mc Ree:
@Erik Estrada I get how someone is unable to refi. How are they unable to sell on the MLS? I think any property priced right will sell on the MLS.
A property owner selling to a wholesaler has a buyer pool of 1. The wholesaler is carving out a margin for themselves and their buyer which may be fair for the wholesaler market. It is unfavorable for the property owner when compared to a large public market where 1,000s of potential buyers can see and walk the property and the property owner has the benefit of expert advice from a realtor. I think the commission will be less than the wholesaler's carve out.
That's major reason why we don't target commercial property owners
- Member since 2024 · 153 posts · 67 votes1y
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
Nobody likes cold callers. I personally don't like cold calls, no matters what I am being called for. I just don't like my phone ringing when I least expect it, picking it up when I would rather be doing my thing, and being offered something I didn't ask for. This is one of the reasons I hire cold callers rather than do cold calls myself, even though I can't train enough any caller to replace me. Unsurprisingly, investors you call are also unhappy with cold calls. But it's one of the few advertisement channels out there. Short of going on ABS or Fox news during prime time, all we can do is run online ads, send direct mail pieces or cold call. And cold calling is least costly of all, with the exception of SMS texting. But since we can't employ SMS services, cold calling is perhaps the most affordable way to reach prospects. And we treat rejections as a norm. We expect to get a lot of NO's (including angry NO's), before someone says YES. This is just part of cold call reach. But there are couple of things I was told by professional marketers who handle cold calls personally. One of them is pattern disruption and ability to engage called party by being genuine and not too serious. Talk to them like you knew them forever. If they lash out, disrupt the pattern. Say something that will make them laugh. And you will improve your rate of conversations per connected call.
- 1yDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 974 posts · 641 votes
Hello, I prefer email. I like to have all the stats in front of me. And then, if it matches up, I usually will schedule a call.
Spark Rental Co-Investing Club577 Reviews- Member since 2024 · 153 posts · 67 votes1y
Quote from @Denise Supplee:
Hello, I prefer email. I like to have all the stats in front of me. And then, if it matches up, I usually will schedule a call.
What is your KPI on cold emails?
- 1yDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 974 posts · 641 votes
Quote from @Eric N.:
Quote from @Denise Supplee:
Hello, I prefer email. I like to have all the stats in front of me. And then, if it matches up, I usually will schedule a call.
What is your KPI on cold emails?
Spark Rental Co-Investing Club577 Reviews - Rental Property Investor · Charlotte, NC · Member since 2013 · 22 posts · 9 votes1y
Quote from @Eric N.:
Quote from @Denise Supplee:
Hello, I prefer email. I like to have all the stats in front of me. And then, if it matches up, I usually will schedule a call.
What is your KPI on cold emails?
Great question, I hope she answers it. I always wonder who engages with this approach because I've never heard of anyone who does
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Kevin S.:
Quote from @Eric N.:
Quote from @Denise Supplee:
Hello, I prefer email. I like to have all the stats in front of me. And then, if it matches up, I usually will schedule a call.
What is your KPI on cold emails?
Great question, I hope she answers it. I always wonder who engages with this approach because I've never heard of anyone who does
She did. Turns out she was talking about her preference to be contacted via email, versus cold calling. I am also curious what is the KPI of anyone who employed email marketing.
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
Especially now, I would say for 90% of people would rather be texted. Even if someone I know calls me, I get a little annoyed, lol
Sam McCormack Realtor - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
Yes. Cold callers are obnoxious.
- 1yDenise SuppleeBusiness MemberRealtor · Willow Grove, PA · Member since 2017 · 974 posts · 641 votes
Not sure what you mean? I was speaking of receiving. I do not do any cold calling at all for our club. As a Realtor, I used all other means. People get annoyed at random calls. Nowadays, unknown callers can be silenced or blocked. It does not make sense. Texts would be a better option but even those can get annoying.
Spark Rental Co-Investing Club577 Reviews- Member since 2024 · 153 posts · 67 votes1y
Quote from @Denise Supplee:
Not sure what you mean? I was speaking of receiving. I do not do any cold calling at all for our club. As a Realtor, I used all other means. People get annoyed at random calls. Nowadays, unknown callers can be silenced or blocked. It does not make sense. Texts would be a better option but even those can get annoying.
You said you prefer emails, I thought you mean you prefer to reach out by email. As a wholesaler I care about two things: KPI and TCPA compliance. No DNC calls. If my KPI justifies cold calls, I will continue hiring VA's to make those. If KPI drops then I have a problem, and it's usually due to data quality or the dialer. Sometimes it's the VA's who can't convert connections to qualified leads.
Cold texts are illegal under current laws and regulations. There are ways to fall into grey area and make it less likely for recipient to complain, but the risk of being hit with $1500 fine per SMS is still there. So, we don't currently do it.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes1y
To answer the original question, yes. I have yet to meet a person that likes to be cold called. I have not met anything that likes to be luke-warm called.
But, at the end of the day, who cares. As others on this thread noted, if you get someone that knows what their property is worth, that isn't your client anyways. I get calls fairly frequently on my personal house and my single remaining rental. Both have been fully gut renovated and are worth far more than I paid for them. But the data scrapers only know what I paid for the property, and see that they can offer me more than I paid while still having room to make money on the property.
I,for one, prefer text to calls. Texts I very quickly respond with a number that is about 15-20% more than the property is truly worth. I figure if someone is dumb enough to pay that, I will sell. Most of the time, I just never get contacted again.Is it annoying that they call or text? yes. But do I know their goals and understand they have no way of knowing I know what my property is worth and they won't get a deal from me? no.
- Member since 2024 · 153 posts · 67 votes1y
As mentioned above, I know wholesalers who cold call commercial property owners and I am happy it works for them. But I could never figure out how they make it work. With the exception of terrible distressed and irresponsible business owners (yes, there are those), most being in the same business line as me know how to market their property to large number of buyers (including through auctions and MLS), directly bypassing me. I believe it would be a waste of time for me to search for a needle in a haystack. But it's me. Others have different experience and continue cold calling commercial property owners.
When you wholesale you must be able to acquire the property at the price that will make sense to your cash buyer, otherwise it's not worth the paper your contract is printed on. And yes, I have to squeeze in my fee. So, I have a firm ceiling, the MAO I can offer seller. Not because I am greedy or insane, but simply because paying above MAO will result in contract that I will never be able to assign. And I don't think I have good odds doing this when I cold call commercial property owners. So I leave them alone on my part.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
Hey James,
I get it – cold callers and door-to-door salespeople can be pretty irritating. I mean, we've all been there, right? But here's the thing: In business, two things truly matter—KPI and legality. Everything else is just noise. As long as those cold calls are bringing in results, they're not going anywhere. I know I will be adding more VA's to my team once I fine tune the lists, quality of leads and accuracy of the skiptraced numbers scrubbed against DNC.
But here’s a little hack to help you out: just don’t pick up calls from unknown numbers. Let them go straight to voicemail – problem solved. Now you can avoid the cold call chaos without having to wish eternal suffering on anyone.
Cheers,
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
Hey one of my first jobs was selling Fuller Brush door to door after school I would make 20 to 30 dollars for 2 hours work.. I loved it.. Taught me that commission is the way to go if your not going to get an advanced degree etc etc - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @Jay Hinrichs:
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
Hey one of my first jobs was selling Fuller Brush door to door after school I would make 20 to 30 dollars for 2 hours work.. I loved it.. Taught me that commission is the way to go if your not going to get an advanced degree etc etcThat was what, 35 years before the internet? Acceptable in the 60's or 70's. Should be punishable by death in 2025.
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes1y
"He who excuses himself, accuses himself."
— French Proverb
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes1y
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
The ones that go door to door looking for leads are the worst , and some of the stupidest people I have met . How so ? I have a utility body truck sitting in my driveway with my construction company name , with a ladder on the rack . I am in the driveway with the aluminum brake , bending some trim for my house , and a young guy with his company shirt tries to sell me home improvements .
I looked at him with a puzzled look on my face and asked him " Are you for real ? He asked why ? Well maybe because what that truck says on the side , and I am here bending aluminum trim , so just maybe I am a contractor . But no he didnt get the hint , he started back on his speech . Finally told him to get his dumb a$$ off my drive and hit the road .
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Matthew Paul:
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
The ones that go door to door looking for leads are the worst , and some of the stupidest people I have met . How so ? I have a utility body truck sitting in my driveway with my construction company name , with a ladder on the rack . I am in the driveway with the aluminum brake , bending some trim for my house , and a young guy with his company shirt tries to sell me home improvements .
I looked at him with a puzzled look on my face and asked him " Are you for real ? He asked why ? Well maybe because what that truck says on the side , and I am here bending aluminum trim , so just maybe I am a contractor . But no he didnt get the hint , he started back on his speech . Finally told him to get his dumb a$$ off my drive and hit the road .
we just get pest control folks coming door to door. they know when its Ant season:) - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @Matthew Paul:
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
The ones that go door to door looking for leads are the worst , and some of the stupidest people I have met . How so ? I have a utility body truck sitting in my driveway with my construction company name , with a ladder on the rack . I am in the driveway with the aluminum brake , bending some trim for my house , and a young guy with his company shirt tries to sell me home improvements .
I looked at him with a puzzled look on my face and asked him " Are you for real ? He asked why ? Well maybe because what that truck says on the side , and I am here bending aluminum trim , so just maybe I am a contractor . But no he didnt get the hint , he started back on his speech . Finally told him to get his dumb a$$ off my drive and hit the road .
Too bad we got "No Kings", If I were the King it would have been legal to shoot him right then and there.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes1y
Quote from @James Wise:
Quote from @Matthew Paul:
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
The ones that go door to door looking for leads are the worst , and some of the stupidest people I have met . How so ? I have a utility body truck sitting in my driveway with my construction company name , with a ladder on the rack . I am in the driveway with the aluminum brake , bending some trim for my house , and a young guy with his company shirt tries to sell me home improvements .
I looked at him with a puzzled look on my face and asked him " Are you for real ? He asked why ? Well maybe because what that truck says on the side , and I am here bending aluminum trim , so just maybe I am a contractor . But no he didnt get the hint , he started back on his speech . Finally told him to get his dumb a$$ off my drive and hit the road .
Too bad we got "No Kings", If I were the King it would have been legal to shoot him right then and there.
Idiots arent in season this time of year
- Realtor · McAllen, TX · Member since 2025 · 141 posts · 58 votes1y
It is depends on the person. Some investors love to talk to people and are willing to listen. On other the hand you will have some investors who will not give you the time and day to listen. They will ether ignore your call, or say "no thanks". Just say thank you and move on. Sometimes you'll get someone who is sarcastic. For example, I had one person tell me if I had some multi-fmaily listings, then said was not interested All in the same message.
The way I like to do it, is I connect with investors on LinkedIn. Once they accept my invite I send them a message introducing myself and the brokrage I work for along with the location of the brokrage. Then I ask if they consider investing or developing properties in my area.
I also answer forum questions here and make connections here as well.
- 1yMarcus PowellPro MemberMember since 2025 · 11 posts · 9 votes
I can't speak for everyone but as a new investor my first task was to go to a lender for pre approvals. Eventually they ended up pulling my credit, little did I know this would alert every lender, wholesaler and debt consolidator in the nation. I recieved between 5 and 10 calls a day for a week then they slowly tapered off. You'd think that more info would be helpful but to a newbie it seemed like a tsunami and I was going to drown.
- Specialist · Sheridan Wyoming, United States · Member since 2025 · 8 posts · 7 votes1y
Tbh, it's tough to get real traction with cold calls now.
Helped a guy earlier this year who was doing deals but had zero online presence. No site, just a Gmail, and people kept saying, “You seem solid, but we couldn’t find anything about you.”
He was also trying to raise private money, but when folks asked to check him out, all he had was a half-baked LinkedIn.
My team helped him build a personal brand that actually matched the value he was bringing, and that changed everything. Clean site, past deals, his story, a few reviews. Nothing over the top.
A couple weeks later, someone found the site and wired $250K for a JV. No cold call, no pitch. Just solid personal branding.
- Member since 2024 · 153 posts · 67 votes1y
Quote from @Khaled Farhad:
Tbh, it's tough to get real traction with cold calls now.
Helped a guy earlier this year who was doing deals but had zero online presence. No site, just a Gmail, and people kept saying, “You seem solid, but we couldn’t find anything about you.”
He was also trying to raise private money, but when folks asked to check him out, all he had was a half-baked LinkedIn.
My team helped him build a personal brand that actually matched the value he was bringing, and that changed everything. Clean site, past deals, his story, a few reviews. Nothing over the top.
A couple weeks later, someone found the site and wired $250K for a JV. No cold call, no pitch. Just solid personal branding.
Building a solid online presence through SEO and brand development is not something that happens overnight. It takes months, sometimes years, to start seeing tangible results. If your goal is simply to get noticed online, a basic website created with AI tools, combined with a few videos on YouTube, can be a good starting point. This won't cost you much, and it will make it possible for people to find your company when they specifically search for it.
However, when it comes to real SEO, the game is not that simple. With the constant changes to Google's algorithms, it’s harder than ever to achieve solid, long-term rankings. Many businesses end up paying significant sums to SEO agencies, only to see little to no results. Good SEO companies can be incredibly expensive, so at that point, you might be better off focusing on paid strategies like PPC or PPL to get quicker results. Cold calling will certainly save you some serious money if done right.
Remember, it will take months before you can establish enough authority for Google to start sending traffic your way, even with a solid SEO strategy in place. It's a long-term investment, and not something that yields instant rewards.
Another thing to keep in mind: the audience you're targeting is often made up of newbies—people who are still learning the ropes. These are also hard-working individuals trying to make an honest living. So, when you're offering services, don't make unrealistic promises. Avoid pulling the wool over their eyes or making them feel like they will get a quarter million dollar JV deal two weeks after online presence. It just doesn't work that way.
- Specialist · Sheridan Wyoming, United States · Member since 2025 · 8 posts · 7 votes1y
Appreciate the thoughtful response, Eric. And you’re absolutely right, real SEO is a long-term game and not something I ever frame as an overnight success. But just to clarify, my original point wasn’t really about SEO.
What made the biggest difference in that $250K JV wasn't ranking on Google. It was personal branding. The site didn’t need high traffic. It just needed to exist, look credible, and tell his story in a way that built trust.
When someone searched his name, what they found finally matched the value he was already bringing to the table. That’s what moved the needle.
I remember working with an agent named Elora. She had been in real estate for over 8 years. Lots of happy clients, tons of referrals, but her online presence was nearly nonexistent. No website, no client stories, just an outdated Instagram page.
She told me, “People know me around here. I’ve never really needed all that.” But when referrals started slowing down, she realized people who didn’t already know her had nothing solid to go on when they looked her up.
We helped her build a strategic website that told her story, showed her past work and reflected who she really was.
A few weeks later, someone searched “real estate agent near me” and found her. No ads, no cold calls. Just visibility paired with trust.
Again, no one should expect overnight results from building an online presence. But being findable with a brand that feels real, that’s what actually opens doors. Especially in industries where trust is everything. When someone’s about to trust you with their money, how you show up online, especially your personal brand, can be the deciding factor!
- Real Estate Consultant · CA · Member since 2024 · 32 posts · 5 votes1y
As someone who’s been an investor in the past, I can say cold calls were my nightmare! I’d get floooooded with irrelevant pitches from lenders who didn’t get my project or needs, super annoying! and a total time sink. It made me realize I’d much rather use online tools to compare rates and terms from lenders on my own time. Doing it online saves me time, offers a convenient way to explore options, and takes away the pressure of those pushy calls :))
- Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes1y
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
I dont like telemarketers in any industry, i especially dislike spoofing.
"We provide great value to investors" is a subjective statement. For some yes....others no.
it's been my experience that investors are rather open minded, providing the deal is lucrative.
- 1yCory KingBusiness MemberReal Estate Agent · Knoxville, TN · Member since 2021 · 164 posts · 77 votes
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
This is an interesting space to be. So as an agent/investor I do both, I prospect "cold call" as well as receive cold calls.
Our approach is one from contribution and understanding that #1 is a long game, wins will happen in the immediate but the fortune is in the follow up and the conversation is the relationship. and #2 this is all about tonality and the initial message or script you can get out in your first 10 seconds.
Asking about their buy box and if they are still investing is a pattern interrupt and one call that they are not receiving I can promise you. No one has ever called me to see what i'm buying, where, etc. See our script/framework below for ideas.Hi (NAME)? Hi (NAME)...it's (AGENT NAME) ... I'm an Investor & Realtor here in (Area)!
I saw you have a rental at (ADDRESS) & I was curious if you're still looking for deals?
ANSWER YES - Awesome!
1. Do you like to buy in a specific area or a more general area?
2. How long have you owned this property? (Really Wondering)
3. Do you have property management or are you handling it? The tenants have been pretty
good or has it been a challenge? Getting a good return?
4. How soon would you like to invest again?
5. What price point do you want to stay under?
6. Were you considering cash or financing?
7. Who else needs to be included in the decision process?
8. If you could find a great deal would you close on it in the next 60-90 days?
9. Out of curiosity, you sound like a buy and hold investor just like me...but if you were to sell
this property... What would you want for it?
• If you could get that number, would it be valuable to know how?
ANSWER NO - Awesome! You can still go into some of those above questions.
1. How long have you owned this property?(really wondering)
2. Do you have property management or are you handling it?
3. Need any contractor referrals?
4. Out of curiosity, you sound like a buy and hold investor just like me...but if you were to
sell this property... What would you want for it?
• If you could get that number, would it be valuable to know how?
• INTERESTED>>>>>>>GO TO CLOSES!!!
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