Any experience with Networth Realty?
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Addison, TX · Member since 2014 · 9 posts · 29 votes
12yHello, my name is Mark Bloom. I am a founder and owner of NetWorth Realty USA. I appreciate the discussion and respect all of your opinions. I can say that at all NetWorth offices we strive to provide real numbers and quality product for our investors. All investors and real estate buyers at all levels should always double and triple check all numbers. We strive for accuracy but we cannot guarantee it. As the old adage goes, measure twice, cut once. At NetWorth, we have built a successful company on long term relationships with real estate buyers of all kinds. In DFW, at the end of the last two calendar years we have pulled all the properties that NetWorth sold to other investor/buyers throughout that entire year. In 2012 the resale price that an investor/buyer who rehabbed a property they purchased from NetWorth, and then listed that rehabbed property on the mls for resale, was 103% of the predicted ARV, on average. In 2013 we did the same statistical analysis and the sales price received on the mls was 100% of the predicted ARV, on average. I am more than happy to share this and any other info with anyone who would like to see it the numbers. I apologize that we cannot track the cost of repairs as easily or with the same accuracy. There are many places a rehab can go askew that are well outside of the control of any wholesaler. That said, we are a horizontal organization that prides itself on the highest level of customer service in the industry. If there is ever an issue with a rehab number or with anything at all, as the owner, I am always available for our buyers. I am happy to provide an extensive list of repeat and satisfied buyers. Not 3 or 4, but dozens, possibly hundreds if needed or wanted. If there is anything at all I can do to help you achieve your real estate investing goals in DFW or any other market please do not hesitate to contact me directly.
33 Replies
- Investor · McKinney, TX · Member since 2012 · 588 posts · 224 votes12y
I would say, do your due diligence, especially around ARV and repair costs. Much of their numbers seem off. That being said, they have a steady stream of properties to review and some of them warrant a deeper look. I'd be curious how many repeat customers they have for flips. I have seen a few rental deals that seem decent, but not home runs.
- Addison, TX · Member since 2014 · 9 posts · 29 votes12y
Hello, my name is Mark Bloom. I am a founder and owner of NetWorth Realty USA. I appreciate the discussion and respect all of your opinions. I can say that at all NetWorth offices we strive to provide real numbers and quality product for our investors. All investors and real estate buyers at all levels should always double and triple check all numbers. We strive for accuracy but we cannot guarantee it. As the old adage goes, measure twice, cut once. At NetWorth, we have built a successful company on long term relationships with real estate buyers of all kinds. In DFW, at the end of the last two calendar years we have pulled all the properties that NetWorth sold to other investor/buyers throughout that entire year. In 2012 the resale price that an investor/buyer who rehabbed a property they purchased from NetWorth, and then listed that rehabbed property on the mls for resale, was 103% of the predicted ARV, on average. In 2013 we did the same statistical analysis and the sales price received on the mls was 100% of the predicted ARV, on average. I am more than happy to share this and any other info with anyone who would like to see it the numbers. I apologize that we cannot track the cost of repairs as easily or with the same accuracy. There are many places a rehab can go askew that are well outside of the control of any wholesaler. That said, we are a horizontal organization that prides itself on the highest level of customer service in the industry. If there is ever an issue with a rehab number or with anything at all, as the owner, I am always available for our buyers. I am happy to provide an extensive list of repeat and satisfied buyers. Not 3 or 4, but dozens, possibly hundreds if needed or wanted. If there is anything at all I can do to help you achieve your real estate investing goals in DFW or any other market please do not hesitate to contact me directly.
- Frisco, TX · Member since 2015 · 1 post · 2 votes11y
I am new to this industry and have not yet invested or flipped a house, so I have little credibility. With that being said I have researched and investigated multiple avenues. Some college classes, a few seminars and many books and programs, and I always feel like I am being sold on why i should go with this school or program. I had the pleasure of sitting down with Jerry Vincent today from NetWorth Realty. Although he is new to the company, an image of honesty and integrity was brightly displayed. For the first time in my pursuit for guidance in this new venture I found it with NetWorth Realty. I will share my experience in the future, good or bad, as I will be purchasing my first property through Jerry before the end of the year. I look forward to meeting the other folks from the company and creating a long term relationship. Thanks
- Fort Myers Beach, FL · Member since 2016 · 225 posts · 124 votes9y
Can you share your recent experience with NetWorth Realty for a year follow up, or have you posted in other threads about the success/downsides?
Thanks
pete
- Investor · Richardson, TX · Member since 2016 · 46 posts · 12 votes9y
Don't rely on their Arv numbers. Just heard a horror story from someone who purchased a house in a Fort Worth. They purchased through networth who said the arv was 165 and now this guy is asking me to buy it it at 135 so he can cut his losses and get out of the deal. On top of that he used a contractor they recommended and got burned by the contractor. I've never used them, just sharing this guys experience.
- Addison, TX · Member since 2014 · 9 posts · 29 votes9y
Dane
I am sorry to hear that someone had issues with a contractor. That's never a good situation to be in as an investor/buyer. We know contractors are the most risky part of the business. Because of that we have NO preferred or recommended business relationships with contractors. We will get bids from licensed and insured third parties for many repair items, or when possible, for a complete job. We get these bids to try and assist our buyers in doing their topical research and to help them reduce the risks of the project. We are happy to give anyone the contact information for far more than one contractor whenever we are asked by the buyer. If a buyer needs anything to help their project, we try to accommodate. We are not the buyer. We do not make any decisions for the buyer. We are not in control of the project. We are not in control of the contractor. There is only so much we can do given our position. We do everything we are asked to by the buyer that could help them. We get estimate on value and repairs so that we can help a Networth buyer to have every chance of success. As I am sure you know, rehabbing houses and dealing with contractors comes with an inherent amount of risk. We cannot guarantee anything to our buyers. At NetWorth, we do go back annually and check the values of properties which we sold to buyers. We care what information we give out, so we go back and see what those buyers then resold their properties for on the MLS. Once we find the resale price minus concessions, we compare it to our earlier, in-house predicted after repair value. On average, in DFW, NetWorth buyers receive 103% of the predicted value when a house is resold on the MLS. That's taking into account every house we sold, that was resold on the MLS, regardless of how well, or even if the rehab was done or not. In your example, it is truly unfortunate that a contractor took advantage of a buyer. If you would please get me the contractors name, I will make sure they never do another bid for NetWorth. However, it is difficult to call our value into question when, as you have clearly pointed out, the contractor took advantage of this investor/buyer and did not finish the work properly or at all. Again, though we cannot guarantee the people who purchase from us that they willl be successful, we are to here reduce risk and help in any way we can. If anyone calls and requests our assistance, we stand at the ready to help in any way we can. Regardless of if they have purchased a house from NetWorth. We're here for investors and we want investors generally in our markets to be successful.
Sincerely
Mark Bloom
- Investor · Richardson, TX · Member since 2016 · 46 posts · 12 votes9y
just to clarify the house was completely rehabbed by another contractor and was finished and he still can't get near the arv. And I know he has already contacted your people about the contractor issue. I just felt bad for this guy and was warning people to do their own numbers and don't trust arv given by wholesalers.
- Investor · Dallas, TX · Member since 2017 · 3 posts · 2 votes9yHi Mark, I met with one of your reps recently. I did see that you provide actual MLS comps when you send out deals, which is good, but when I went over the material and thought about what I was told it seems like your almost required to use the 212 financing to get preferential treatment on deals. When you add up all the financing and closing cost the "potential profit" was basically cut in half. I took away that if I wanted to pay cash I probably wouldn't get the property if one of your other clients wanted it and used 212 financing. Those numbers were based off the example I was given and assuming a 6 month hold. I'm not saying they're bad numbers I just want others to be aware of the back end costs associated with the deal. Mark, can you respond to that? I welcome any correction in my train of thought.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Dane Ohlen absolute worse company I have ever dealt with they prey on newbies.. how they still do deals Is a mystery to me.. they are to be avoided at all cost in my personal opinon based on first hand experience with these guys
- Addison, TX · Member since 2014 · 9 posts · 29 votes9y
Lynsey
We do not require anyone to use 212. However, if you use 212 you do get some preferential treatment on our off market inventory. By no means do all of our buyers close with a 212 loan. 212 recently came out with some new programs for our borrowers. These programs range from a typical 3.9 points and 13% annual interest on a 6 month note, down to 1.9 pts and 9.99% interest on a 6 month note. These loans require low out of pocket and allow some borrowers to take advantage of leverage, while always keeping in mind time is of the essence. So, yes, the 212 loan cuts the profit in half, roughly, compared to a cash purchase. However, that's only half the equation. With the 212 loan you are able to get the funds to purchases, rehab, and close the project for roughly 20% of the total cost of the project if done as a cash purchase, then in theory you can do 5 times as many properties, and in turn make 2.5 times the profit on the same amount of cash used for just one project. This is how leverage is best used in real estate. The programs I mentioned have just been released in the last day or two.
Jay
As for your experience, I am sincerely sorry. We do not have offices in or anywhere around Oregon so I do not know whom you dealt with or what your issue was. We sell a few thousand properties a year, and in doing so, we pride ourselves on trying to create value and appease as many parties as possible. Again, I am sorry you have had a less than satisfactory experience.
We take any concerns seriously and will do what we can to fix any issues brought to our attention.
- Flipper/Rehabber · Dallas, TX · Member since 2015 · 91 posts · 31 votes9yI had a guy from net worth (who did not tell me he was from net worth) say he was a buyer on a north Richland hills house last year that I emailed out at wholesale deal. He put $1500 earnest money up, then I saw a networth email blast he was marketing the property trying to do a double wholesale an marked it up a few thousand. I was pretty upset. He could hv just told me he wanted to JV on the deal as several net worth guys hv called me and asked if we could jv before
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Mark Bloom of course you don't you would not be able to do what you do legally in our state and you guys are the worse of the worse
it was a few deals I funded in Dallas and both disasters.. your guys lied about ARV and rehab cost my borrowers relied on it. and they lost all their dough.. disaster.
along with that your just reselling stuff that is MLS.. you just tie it up and wiat for the dummys to buy it my guys were dumb enough to deal with you.. hopefully once this upmarket dies down you will find some other victims in some other scheme.
- Addison, TX · Member since 2014 · 9 posts · 29 votes9y
Jay
Unfortunately, none of that is true.
We purchase and sell properties legally. We don't assign and we do nothing illegal at all. You should be careful what you say as it is illegal and quite outrageous to make such claims. There are likely a hundred reasons why your buyer couldn't get the arv, none of those being that the comps didn't exist. As the gentleman above reports we use solid MLS comps. There are a lot of places your borower could have gone wrong in their deal. With all due respect, having a lender that isn't even in the state doesn't help. Regardless, we run an extremely legit business or we wouldn't be in business. We are state licensed and audited in every state we operate in. We also repull all the properties we sell, the following year, on the MLS, to see what they actually sell for after concessions. Nobody else in our industry does this and we do it because we stand behind our product. On average, in DFW alone, for the last four years, our buyers receive over 100% of predicted ARV. That's pulling an address search for every Property sold. So I would say, no, I would insist, that though your buyer may have had issues getting the predicted ARV, it is not because we were wrong per se, but because of one, or some, of the many other issues, totally in your buyers control, not in ours, that arise throughout the life of any project. I find it hard to believe neither a quality outside 3rd party lender or a buyer doing any due diligence in their market couldn't see a lie as blatant as the one you proclaim took place here. When 212 lends on a property, we get a state licensed, independent, 3rd party appraiser to give us a value. We don't do this because we lie. We do this because we are confident in our values.
We take pride in who we are, and what we do. Also, to be clear, we wouldn't be the worse, we would be the worst. Regardless, we are not. I'm happy to send you any data on our history of being more than accurate with our ARV predictions.
Best of luck in your future endeavors.
Mark
- Addison, TX · Member since 2014 · 9 posts · 29 votes9y
Sheila
I'm sorry you were upset. We put up em and tried to resell a deal. We don't JV. We buy and sell. I am sorry if you felt the agent could have been clearer about who we are and their intent. Our goal was to buy and then sell the deal. When we buy, we would buy from you. Not cutting you out and not trying to be shady in any way. Also feel free to reach out if I can help at all.
Mark
- Contractor · Dallas, TX · Member since 2016 · 97 posts · 38 votes9y
I was hesitant to add my comments on this, as I don't like airing dirty laundry or hear-say in public. But as a Networth customer, I felt I had the right to do so. I purchased a property from Networth last year. I will say that they handle the up-front things in an organized and professional manner. But I was very unhappy with the final closing arrangement. First, because they were vague about the buyer having to pay everyone's closing costs and because they allowed the previous owner to stay in the property for another 2 weeks and didn't do anything to assist when they stole a couple thousand dollars worth of appliances that were supposed to remain in the home. The answer I got was, "sorry, call your insurance company". Then silence was all I heard after that.
I think it's no secret that the comments we've all read about ARV and Rehab are absolutely true. The property I purchased was overstated on ARV and understated on rehab. It's very common to hear things like, "just reface the cabinets", or "that bathroom just needs some paint". Once the demo starts, all the fun stuff they don't discuss gets uncovered. To my surprise, the appraisal I got after rehab was about $10k lower than their projected ARV, and that's after doing way more to the property than anyone ever imagined. After seeing that, I decided to convert the garage into a separate living space. Had I not done that on my own, I'd have lost about $10k in equity.
One other things they don't tell you about is whether the ARV they suggest will actually sell in the neighborhood where the property sits. In my case, selling a $250k home in Oak Cliff will take months. That means more holding costs and possibly broker fees.
Fortunately for me, I was able to turn my semi-horror story into a great rental property. But that was not my intended exit strategy and it was without any help from Networth.
I wish I could tell you there are better wholesalers out there. But the truth is most follow the same 70-75% rule based on a elevated ARV. Even the newer websites that claim to review ARVs of its listing wholesalers don't actually perform as promised. I worked on a deal from a husband/wife team that posted and the property appraised $20k lower than their ARV. When I ran the comps myself, I saw similar results unless I stretched the search to over a mile away. So much for verifying posts.
- You need to verify comps inside a half mile or within the subdivision.
- Modify comps appropriately if they don't match exactly.
- Verify the rehab with your own contractor or get good at estimating yourself.
- Do the math, then do it again just to be sure. If it doesn't add up, look for the next opportunity.
If people stopped buying wholesale, some of these issues would self-correct. But as long as there is a steady stream of new investors willing to buy wholesale, this problem is not going to go away anytime soon.
Good luck to you.
- Rental Property Investor · DFW · Member since 2015 · 89 posts · 36 votes9y
I just recently met with one of Networth Realty's agents. I'm not extremely savvy in property investments. I'm actually new to the game. One of the houses I was shown is in the Oak Cliff area near Kiest & Polk. I grew up in Oak Cliff and it is/does seem to be a hot market for flipping. But, I was real uncomfortable with a home in this area with an ARV of over 200k. The guy explained this 212 to me that I was not completely comfortable with. This may work for many but I chose to pass as I couldn't see buying a property in this area at $110k before repairs and then indebting myself to an HML at over 2k per month for at least 4 months while hoping and praying that the house will sell quickly so I can get my $ back. Because I know the neighborhood I wonder who are the buyers at these prices. This is home and others promoted by NR are not in affluent areas of OC. The people in these communities cannot afford 250k homes. Unless the goal is to gentrify the neighborhood and price out/run out the hoi polloi.
- Investor · Philadelphia, PA · Member since 2017 · 18 posts · 8 votes9y
I am currently doing a rehab with Networth Realty and the experience has been pretty bad. I was told the rehab will cost 25K and currently I have spent over $31K and the contractor has found something else that will put me at an additional $1500 out of pocket. When I put in a draw request, they paid $1500 less. I just keeps getting worse. Upon expressing my frustration, the sales guy from Networth Realty apologized and said he was embarrassed by the number of problems but then lied to me about the ARV (gave me a new ARV based on total property size not the building size. Guess he thinks I am dumb). And this time, the ARV he gives is all of a sudden $10k more than the initial one he gave when selling to me. My house is supposed to go on the market this week and I am only praying and hoping I atleast break even. Of course, I will never be dealing with them again
- Investor · Philadelphia, PA · Member since 2017 · 18 posts · 8 votes9y
Just have to say this is a traumatic loss for me. I dont understand how in this country - people are able to get away with such dishonesty and lies by ommission. Reaping people off their hard earned money. I worked for a whole year to save for all the funds I put in this transaction.
- Rowlett, TX · Member since 2016 · 29 posts · 2 votes9yI've bought two properties through NetWorth. It wasn't the ARV that I had a problem with, actually they were 10K UNDER what it was appraised for once I refinanced. It was the dang rehab that got me. There are always surprises! I ended up owner financing both properties to not loose money, but only make much more money in the long run.
- Houston, TX · Member since 2010 · 150 posts · 159 votes9y
I have not ever bought a property from them but I got on their email list years ago. I got discouraged when they had a property I was interested in so I did my due diligence. I had a realtor pull the comps and compare it to their comps provided on the email. The comps they provided were cherry picked and only represented the higher sales. Also, their comps were not even in the same neighborhood. They used the comps from a higher value neighborhood in the area.
In case it was a fluke I tested their comps again on another house. Once again my realtor comps gave me all the comps in the immediate neighborhood but Networth comps were cherry picked and all over the place.
I guess its like any other possible deal though, you have to do your own due diligence. Usually when I buy I pay very little attention to the asking price. I figure out ARV minus all costs involved and that is what I can offer. If someone else will offer more then so be it.
Having said all of the above I will say that they were offering a house a couple of months ago in a neighborhood where I have two rentals so I know the values. Their asking price was in line with what it probably should have been as long as the repair estimate was accurate. I didn't check their comps though. Maybe its just hit or miss...I don't really know.
- Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes9yPatrick Ellis you mention 70-75% but when o run their numbers it's now bumping up to 85% wholesale. Have you seen this as well?
- Contractor · Dallas, TX · Member since 2016 · 97 posts · 38 votes9y
Lucia, I would say it's a combination of two things. One, the homeowners are getting a little smarter. Two, everyone wants to make more money. I wish there was a way to know what the wholesalers are making on each deal. When wholesaling started, it was a common understanding that wholesalers would make $5,000-$10,000 on a deal, similar to that of a Realtor. But I would guess that they are doing what they can to increase their profits today because there is no rule or governance that says they can't. At least real estate agents are somewhat bound by the transparency of a 3% commission.
Good luck to you.
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