New Western Acquisitions in Houston?

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Ethan G.:

I've had decent experiences on a couple years ago.

OK that is good to hear!

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Caleb Brown:

They are here in my market. What I see here are comps are accurate on 8/10 so not too bad. At the end of the day you do your homework and see if it's worth it. The EMD is non refundable so don't go under contract unless you are ready

Definitely. 8/10 isn't bad. I'm seeing 1/5 accuracy.

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Steve Morris:

Isn't there some woman on here working for them and extolling their virtues?

Ask her.

Oh yes.

Daniel Wrentz

Real Estate Agent · Houston, TX · Member since 2020 · 54 posts · 11 votes

5y

I see the same with them in Houston. I went to look at a flip a week or two ago. The ARV I found with an agent was 266k and the asking was 175k. But after seeing it, the house needed a lot of work and the repairs came in over 50k, putting me no where near the 175k asking.

Being 50 people showed up to see the house I minimized my profit and put in the bid. But somebody paid OVER asking (30k over my bid).

My only rational is that these are owner occupants, landlords not caring about equity, or just people being taken advantage of. Any way its astounding.

I spoke with another big wholesaler here and was told they are aiming for 80-82% minus repairs. Small margins for flippers.

5 Reply

Shahriar Khan

Investor · Houston, TX · Member since 2010 · 234 posts · 145 votes

5y

@Cortney Arenstein they are a very large wholeseller and target first time investors in most cases ( they may argue) ... and some people find them good to deal with and others dont. For investors who are buying continuously , they are expensive. I used to be on their list then removed myself mainly because price being too high for me and their business model (double close, sign NDA, meet them and all those crazy thing) .

For wholesell market , i assume 100% of data is wrong and do my own analysis to see if i like it and 100% careless of what they ask and what they say . Suggest you make offer the way you think is right for you and find a balance between very large wholesellers vs new wholesellers .

Best wishes.

6 Reply

Jim Scandola

Cypress, TX · Member since 2020 · 11 posts · 8 votes

5y

Cortney, My experience has been similar. I have been on their email list for several months and the deals are very skinny after running the numbers. You have to keep at though to find the diamond in the rough.

As a buy and hold investor it seems that many of their properties are in neighborhoods I would not want to own in and the properties in the decent neighborhoods are highly sought after but the numbers don't add up in many cases.

4 Reply

Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

5y

These companies are making money on those who are unwilling or unable to do the exercise you did to find out the truev value of a property.

For those lazy investors, there is always a hefty price to pay either in the short or in the long term. It sucks, but this is the genius of marketing, unfortunately.

7 Reply

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Ola Dantis:

These companies are making money on those who are unwilling or unable to do the exercise you did to find out the truev value of a property.

For those lazy investors, there is always a hefty price to pay either in the short or in the long term. It sucks, but this is the genius of marketing, unfortunately.

This makes me sad. It takes so much time to run correct and proper comps on property after property, and I know MANY newbie investors that do not have access to an agent willing to put in this time (I wouldn't do it for just anyone--it is a full time job!)

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Daniel Wrentz:

I see the same with them in Houston. I went to look at a flip a week or two ago. The ARV I found with an agent was 266k and the asking was 175k. But after seeing it, the house needed a lot of work and the repairs came in over 50k, putting me no where near the 175k asking.

Being 50 people showed up to see the house I minimized my profit and put in the bid. But somebody paid OVER asking (30k over my bid).

My only rational is that these are owner occupants, landlords not caring about equity, or just people being taken advantage of. Any way its astounding.

I spoke with another big wholesaler here and was told they are aiming for 80-82% minus repairs. Small margins for flippers.

How did you find out what the winning bid paid? It was all so bizarrely clandestine "go to your car and text me your bid after the showing." I went to ONE in person showing with them and saw the same thing--yeah I COULD do $5k of repairs to make this "rent ready" but that is a sh*tty business model when it really needs $25k repairs to be worthy of human life. (Not my bag, baby. I have no interest in being a slumlord--there is more to life than squeezing blood out of stones)

I have been to three other "in person showings" with three other wholesalers and it was either conducted as an auction or they just said "email me your offers." But the community of investors that showed up all had a nice chat about the property and repairs and value...

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

Originally posted by @Jim Scandola:

Cortney, My experience has been similar. I have been on their email list for several months and the deals are very skinny after running the numbers. You have to keep at though to find the diamond in the rough.

As a buy and hold investor it seems that many of their properties are in neighborhoods I would not want to own in and the properties in the decent neighborhoods are highly sought after but the numbers don't add up in many cases.

Yep. I see the same thing. That double close, plus no refund on the EM eats up the narrow margins.

Daniel Wrentz

Real Estate Agent · Houston, TX · Member since 2020 · 54 posts · 11 votes

5y

@Cortney Arenstein

You’re right, that’s just what the agent told me after the bidding closed.

I did not care for the process and doubt I’ll be dealing with them much the future.

Shahriar Khan

Investor · Houston, TX · Member since 2010 · 234 posts · 145 votes

5y

@Ola Dantis i would not call any investor lazy :) rather they have a different valuation assumptions and expected outcome vs some of us. At the end its risk adjusted return ..

@Cortney Arenstein at the end it will probably down your/our buying style vs sellers style. I personally avoid all wholesellers who requires you to the showing etc to even make offer. I like to be on emails with prices on. If i like it then make offer and if i dont like it "delete".

Case in Point 1: Day before yesterday, I found a listing on Facebook and made an offer on messenger , we texted back and forth and gap between offer vs asking was close. He went to the property and i did facetime and went under contract same day within 4 hrs and will be closing soon. Didnt even have to get up from my chair.

Case in Point 2: I love it when New Western will send me offer "as buyers" for some of our properties listed on MLS. I guess they do NDA for a reason ..

Ramon Vazquez

Investor · Kansas City, MO · Member since 2018 · 117 posts · 46 votes

5y

@Daniel Wrentz sadly the market is so hot that wholesalers can ask crazy price and some will pay!

Steve RozenbergPro Member

Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

5y

I would say that there's probably just as many bad companies out there as there are good. You definitely want to do your due diligence and have a expectation meeting and conversation about what you can expect out of them as a provider and what they can expect out of you as a customer.

There are a lot of great companies here in Houston as I am a local and been doing this for over 20 years I know that yes there are some bad ones but definitely some good ones if you do a little bit more of a deep dive you will find certain names of certain people and certain companies come up in a good light and other ones will come up in a not-so-good light this is the time that you do your homework and do your due diligence to make sure that you were aligning yourself with the right type of people

Guy Gimenez

Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes

5y

I have never purchased anything from them but years ago I ran comps on a found, without exception, their numbers were fictitious. I think they're business model is geared toward those investors who don't or can't do their own marketing, so those investors have to pay closer to retail ad/or do their own work on the properties in order to make the numbers work.

OP

Rental Property Investor · Katy, TX · Member since 2016 · 52 posts · 44 votes

5y

@Steve Rozenberg WOAH! The man, the myth the legend! Thanks for chiming in here, fellow Houstonian friend! I'm a huge fan! "certain names of certain people and certain companies come up in a good light and other ones will come up in a not-so-good light" Man, I'll say!

Sandeep Majumder

Contractor · Cypress, TX · Member since 2017 · 38 posts · 4 votes

5y

@Steve Rozenberg can you recommend any wholesalers who actually have good deals? I’ve been having problems finding any decent deals lately and haven’t purchased anything in months. I only buy to rehab and sell at the moment.

Sandeep Majumder

Contractor · Cypress, TX · Member since 2017 · 38 posts · 4 votes

5y

@Cortney Arenstein I’ve tried bidding on a few of their properties over the last few years (a very small number where the numbers actually made sense) and never had any luck. The bids always seem to go over asking and I agree with you - their comps hardly ever make any sense. I just stopped looking at them a long time ago. As a rule I tend to never trust a wholesaler’s comps.

Steve RozenbergPro Member

Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

5y

@Sandeep Majumder

Being in real estate for the past 20 years locally here in Houston I would say I probably know most everybody both good and bad.

I would say you really want to be careful asking people advice because this is all based on what your definition of a good deal versus what a bad deal is. There may be deals that I think are great deals from a wholesaler that you may think are a bad deal based on what your goal and what your strategy is.

If you’re looking for a good wholesaler on your own I would suggest you make sure you have clearly defined goals and non-negotiables what type of property you will except and what you want to except. Then sit down and have an expectation meeting with them and let them know exactly what you’re looking for and what deals you want to see. If you just say bring me deals they don’t know what is a good deal what is a bad deal for you based on your goals and based on your strategy if you don’t tell them

[email protected]832-776-9582 Podcast Guest on Show #469

Wale LawalBusiness Member

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

5y

@Cortney Arenstein

Thank you for starting this. This is a very huge debate and a big issue in the wholesaling space.

A lot of wholesalers are untrained and trying to make quick cash from uninformed/uneducated/lazy new investors.

Also because of the current market situation of VERY LOW INVENTORY, I have received inquiries from wholesalers to help them list their Wholesale Deals on MLS because they want to maximize their profit as MLS will increase their buyer poll.

At the end of the day, Buyers need a solid education in order to get great wholesale deals.

I have seen many new flippers people overpaying for wholesale deals (acquired from these so call wholesale companies) and eventually could not sell the house after the rehab because nobody will buy at their asking price.

@Ola Dantis and @Steve Rozenberg also made valid points. There are good wholesalers out there, buyer just have to go through a lot of them before finding the good ones.

NETWORTH BUILDERS5236 Reviews

Website View Page

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

5y

Originally posted by @Cortney Arenstein:

Originally posted by @Jim Scandola:

Cortney, My experience has been similar. I have been on their email list for several months and the deals are very skinny after running the numbers. You have to keep at though to find the diamond in the rough.

As a buy and hold investor it seems that many of their properties are in neighborhoods I would not want to own in and the properties in the decent neighborhoods are highly sought after but the numbers don't add up in many cases.

Yep. I see the same thing. That double close, plus no refund on the EM eats up the narrow margins.

Does the buyer pay for the double close or does the buyer simply pay for one close?

Tyler Hungerford

Real Estate Agent · Riverside, CA · Member since 2017 · 204 posts · 105 votes

5y

New Western, Fairtrade, and Networth Realty are all the same. It's for first time investor who has no idea what they're doing. They take advantage of those young investors. Not only do they give bad comps, but they also charge you to double close, admin fees, etc. They upsell by 5% or more on these deals. So over these guy in my market. They have no idea what they are doing.