New Orleans, LA · Member since 2014 · 53 posts · 5 votes
so, on Nov 3 I got my first contract. I found the deal on zillow. he first wanted 180k, but got it under contract for 119K, we even negotiated lower to 110k, but didnt get the second contract signed. Long story short i under estimated the repairs the home needed. I marketed the property, got some interested folks, but what they were offering wouldnt work. The seller is getting impatient, and also said people are calling him saying his home is for sale, so he thinks im trying to get over on him. He is now upset and dont want to do the 110k he is set on 119k and that price wont work. What can i say to this seller to assure him im only trying to help? How do you handle objections where the seller sees your ads about their home?
When are you required to close? After a month with no signs of progress on you actually buying his house, I don't blame the seller. You were up front and explained you really weren't the buyer, just acting as broker to sell the home right?
Great - - just admit RE Fraud, selling w/o a license :(
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Alesha Rayford the cat is out of the bag....you have to go into damage control mode. As a wholesaler, although I've never experienced this situation, I'd say level with the seller and inform him that the deal, after further review does not fit your investment criteria however opposed to walking away leaving him/her empty handed, you wanted to market the property to assist him with finding a seller. How far under contract price are your buyers offering? I'd take what the buyers are offering(if reasonable) and ask the seller to carry back the difference in a short term loan. You may have to take a hit on your wholesaler fee. Once you have all parties on board you can move to closing. Best of luck to you!
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
9y
When are you required to close? After a month with no signs of progress on you actually buying his house, I don't blame the seller. You were up front and explained you really weren't the buyer, just acting as broker to sell the home right?
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
9y
This is a classic example of brokering real estate without a license and the harm it does to the seller and the liability for the wholesaler I would double check your state laws you have tied up the property for over a month what problem are you solving for the seller?
New Orleans, LA · Member since 2014 · 53 posts · 5 votes
9y
Thanks for the advice! @Shawn Ackerman. The offers im getting wouldnt work for me or the seller. We did negotiate a cheaper price, but then when he saw the ads about his home, or heard about them he changed his mind. He doesnt want to do any type of terms. If the seller is not willing to go down on the home, this deal wont work.
Wholesaler · Noblesville, IN · Member since 2016 · 18 posts · 11 votes
9y
Questions lead to confessions, find out more about why they need to sell and emphasize on how your going to fulfill their needs. Silence is your friend, ask questions and just listen for their answer, listen for the keywords that made them start working with you.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@Alesha Rayford your buyer(s) are purchasing in cash correct? I'd present the buyers POF with a verbal offer from the prospective buyer anyway. Perhaps knowing that you have a competent buyer the ready will sway him. Perhaps you can get two buyers on board to join in on the deal to get you the number your looking for. Less risk for them and seller get's what he wants. Time to get creative.
Investor · Virginia Beach, VA · Member since 2016 · 90 posts · 49 votes
9y
Where were your ads posted? Hopefully not Craigslist, where the other 99% of bad wholesale deals are.
Do you not have a list of cash buyers? When I was wholesaling, I would always tell sellers that they would never see their house on Craigslist, or see it advertised anywhere. So I know that any public advertisement on their home would make them angry, especially if you listed the selling price.
Once they find out how much you're making, it rarely turns out good. Especially if you've tied up their house for over a month.
Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes
9y
@Alesha Rayford here's my 2 cents. Never ever post details of your deal on Craigslist or any other public forum. Say something like - "Investor special available for cash, 3/2 with basement, garage, 50K repairs in xxxx city. Must have verifiable POF, Serious cash buyers ONL, $2500 EMD. Please call for more info."
Also it sounds like you don't have a deal, you need to cancel your offer in writing to the seller.
Also as @Simon Ghandil stated do you have your own list of buyers?
When are you required to close? After a month with no signs of progress on you actually buying his house, I don't blame the seller. You were up front and explained you really weren't the buyer, just acting as broker to sell the home right?
Great - - just admit RE Fraud, selling w/o a license :(
Flipper/Rehabber · Sacramento, CA · Member since 2016 · 807 posts · 815 votes
9y
Man, so many things about this that aren't right. This is why some people think wholesaling is illegal brokering.
As a wholesaler, your role is to find off-market deals to cash buyers. Not contract properties that are already on the market and add a couple grand for yourself. There is absolutely no value in that.
You need to get a list of cash buyers in your area that you can call yourself. Broadcasting the property itself on craigslist is never a good idea.
At this point, you need to back out of the deal and tell him that the numbers aren't working for you and you have another investor that'll buy it for X. If he wants to sell it to that person, they can make their own contract. Don't expect to get paid on this.
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
PERFECT EXAMPLE of unlicensed brokering, the games people play, and why I legitimately call them SCAMMERS. If the OP wants to practice real estate, get an education first, get the license, and be above board. Now this seller will probably never want to trust anyone promising to buy their house. Would you blame them?
You stated she should tell the seller she wanted to help the seller by marketing the property. That is brokering real estate. The world is full of unlicensed scammers and for good reason. There aren't enough people calling them out for their BS tactics.
She needs to apologize and walk away now before she makes things worse. She WAS trying to get over on the VICTIM by misrepresenting herself as a buyer.
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
I do note some of the unlicensed brokers in this thread offering advice. I find the practice to be more unethical and sleazy by the day. When one of these unlicensed brokers gets a property under contract, they run to BP proudly proclaiming they have a contract. They get a bunch of praise from other unlicensed people. Apparently, few have a real understanding of the damage done to sellers. They provide the same old garbage about being a "service" to sellers. If they are successful, they slice of equity and push the deal out under market. This rips off the sellers. WHY are these people mostly unlicensed? So they can act with impunity, unethically, and not be held accountable. They refer to themselves with a title that implies they bring value. BULL!
Real Estate Agent · Jacksonville, FL · Member since 2016 · 406 posts · 163 votes
9y
I don't know what the laws are for Louisiana but here in Florida you need to be licensed to market real estate for sale. The way to wholesale in Florida is to market the contract and not the house. This means you will have to do a bit of networking and possibly direct mail to get a big fat Cash Buyer's list.
You might want to consider building your list as quickly as possible. Send emails or call all the property managers in your area and ask them if they have any landlords looking to build up their portfolio. Undoubtedly you will get a lot of "yes"s and "why"s. Tell them you are a local wholesaler and you get a lot of off-market deals and you want to let them know as soon as a hot deal hits your desk. Generally speaking they will give you permission to add them to your list.
It sounds like your numbers are off for a good flip so I would target buy and hold investors. That's probably your best bet.
If you really are pressed for time reach out to other wholesalers in your local market and tell them that you have a deal you can't move and you will split the deal with them 50-50 if they can move it.
This will give you a chance to get your deal done and hopefully learn from an experienced wholesaler along the way.
If nothing else works, cut your losses, lick your wounds and move on.
In the future avoid marketing the house publicly and send your deals directly to your list. If you get no bites, hook up with other wholesalers for their lists and split or cut the cord.
Investor · New Orleans, LA · Member since 2012 · 968 posts · 747 votes
9y
You cannot publicly market properties for sale that you do not own. If you do so, you are practicing real estate without a license.
The only legal way for you to publicly market properties for sale without a real estate license is to actually buy the property first, then you can legally market it as a for sale by owner.
By publicly marketing properties for sale that you do not own you are practicing real estate without a license and are subject to the below provision of Louisiana real estate law and will be subject to fines of up to $5,000 and the commission may require that you return any fees collected for engaging in real estate activity. In addition, the commission may assess costs and attorney fees against the unlicensed person found to have been engaged in real estate activity without a current license.
http://www.lrec.state.la.us/license-law#§1459. Real estate activity; unlicensed persons
§1459. Real estate activity; unlicensed person
A.(1) In addition to any other civil remedy or civil penalty provided for in this Chapter, the commission may issue a subpoena to any person or persons who the commission has probable cause to believe has engaged in real estate activity without a currently valid license.
(2) Subpoenas issued by the commission shall comply with the notice requirements of R.S. 49:955. These subpoenas shall be served upon the unlicensed individual personally or by any type of mailing requiring a return receipt and shall include a statement of the manner in which the unlicensed person shall be required to respond to the commission.
B. The commission may impose a civil penalty of no more than five thousand dollars upon any unlicensed person who, after a hearing or informal resolution in accordance with all provisions of this Chapter and the Administrative Procedure Act, is found to have engaged in real estate activity without the benefit of a currently valid license having been issued by the commission pursuant to the provisions of this Chapter. In addition, the commission may assess costs and attorney fees against the unlicensed person found to have been engaged in real estate activity without a current license.
C. The fact that any person engages in or performs or offers to engage in or perform any of the practices, acts, or operations set forth in R.S. 37:1431(7) is prima facie evidence that such person is engaged in the illegal practice of real estate.
D. No person engaged in real estate activity without a currently valid license shall have the right to receive any compensation for services so rendered. In addition to any other penalties imposed under R.S. 37:1455 and 1458, the commission may require that any person engaged in real estate activity without a license return any fees collected for engaging in real estate activity.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
LOL! @John Thedford Well we have you to cure the world of scamming. Thanks for your input in this post. I'm sure the author greatly appreciates it. And thanks, I have my 900th post thanks to you.
I was aware of that statute. All the guru garbage and BP cheerleaders help promote this garbage. These people aren't taught anything about laws, contracts, specific performance, fraud, etc. All they see is a bunch of uninformed and mostly unethical dishonest yahoos giving a high five and encouraging this garbage. I have found lots of frauds and scammers on BP that are illegally brokering RE in Florida. Most just continue and believe they will never be held accountable. When these people have no honesty, morals, ethics, and no money, anything that appears to be fast easy money will lure them in.
You are welcome. I know who is honest and who isn't. You aren't hard to figure out. Put on your cheerleader costume and continue to encourage people to be dishonest! I hope it takes you far. I use the term sleaze and scammers for a reason!
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@John Thedford your input is greatly appreciated my friend. Please continue to provide quality input on forum threads as you are undoubtedly moving the REI culture forward. Be well. FYI I encourage hustle, drive, motivation and ambition. And I do it very well across many social media platforms and in person each and every month. I have also empowered many new investors to begin on the road to financial freedom through both conventional and unconventional investing strategy. I'm sure we( the BP'ers) can certainly count on you for your wealth of information as you appear to have been doing real estate investing in one capacity or another for at least 60+ years. I would argue however that there is limited time left for dinosaurs..... Look around, they are all extinct. This is the time of the millennial my friend. Get used to it LOL!
Millinnial FRAUDS? Is that the new norm? You bet it is apparent the difference in generations and that fact many parents fail to teach their children honesty, integrity, etc. Most are out to get whatever they can, any way they can, at any cost. No doubt you are part of that crowd. One day someone you love may be scammed...and I hope you are as forgiving of them! You DO stand out in the crowd!
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@John ThedfordNews flash!!! Don't think it was Millennials that took the housing market down in 07', 08'my friend. It was more of the dinosaur crowd. You know, gentlemen like yourself who fixed the housing bubble.