Newb to Wholesale- I have 50 properties and need some guidance

41 Replies

Guys. 

I have been working on Land Flipping in Florida. Sending out mailers, originally trying to buy land for pennies on the dollar. A gentleman received one of my mailers and notified me that he had approximately 50 properties that he acquired via Tax Deed. I originally thought no way, I can't buy $250,000 worth of land but maybe I could help him sell them via assignment. He agreed to allow me to sell them via assignment. 

So now I have 50 properties to sell in Florida.  Some of the properties are not worth much more than the value of his tax deed ( agreed sales price). There are a few that I may 'cherrypick'. The properties range $3k to $15k in value.

 How would you advanced/ experienced wholesalers go about this??

I am targeting craigslist, sending flyers to local neighbors, putting signs in.... what is most effective?? 

@Eamon Sullivan I think there was a BP podcast on this way back in the olden days.  As I recall it was a lot of Craigslist spamming (not in a bad way) and trying to appeal to people that emotionally wanted "land".  That was after calling the neighbors and seeing if the wanted to buy it.  If you're looking at the $3K price point I'm imagine the salient points in the podcast will still ring true.

Unless you are licensed this is brokering real estate without a license. Using contracts to circumvent licensing is not legal. You cannot advertise properties for another without a license. 

@Eamon Sullivan

It is not legal to advertise properties you do not own unless licensed. Double closing is not relevant. Only licensees may advertise properties they don't own. Think about this: if you cannot assign the contract you cannot SELL the property for another. IF you can assign, you are selling property for another. That IS brokering.

If you get licensed you can represent others. Just because you have done this before only means the state was never aware of your actions. Generally offenders get a cease and desist for their first offense. They can charge someone with a 3rd degree felony if they feel it is warranted.

@John Thedford Just read a few of your post concerning this matter. I've started the process of getting my licensure. Thanks 

Any idea on how you would approach selling these properties ( with a license of course)?? 

@Eamon Sullivan

If licensed, list them. If they are lower end properties you would probably charge a higher commission. I see quite a few vacant lots listed at 10% or so...but that is up to the agent and seller. If you want to do something before licensed, buy them...then resell. If your cash is tight, ask seller to carry them. Once in your name you are good to go.

Does the seller need to sell all of them or will he finance them to you? If so have him finance them and you can resell them at  a higher price and rate and make the cashflow off an owner financed deal. If they default keep their money and find a new buyer.

@Walter Roby jr  @John Thedford

How would you structure a deal with the owner to seller finance all of them and limit risk/ exposure while still being able to sell the properties? 

How would I be able to sell the properties if there is still a mortgage on the properties as a whole? Or would essentially be a line of credit backed by these properties? 

I prefer the idea of cashflow more than a few big chunks of cash. 

The seller has agreed to offer 4% and low down payment on the properties. 

Thanks for your help guys

AS stated above to be legal just have the seller sell you 5 at a time on contract.. easy terms and it can be a land contract and you don't need title insurance or anything.. now you own them sell those 5 rinse repeat..   trying to play the assignment game with this super low end stuff seems to me to be pretty risky and non productive.. you will have all sorts of bottom feeders who will probably try to go right around you if you don't own them.

You are wholesaling. What you are doing is perfectly legal in Texas. Idk about Florida, but what you are doing reassigning contracts shouldn't be illegal. 

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

Originally posted by @Eamon Sullivan :

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

 The state cracked down after lots of victims complained to the state. 475.43 is the governing statute. Here is what most people do not understand: the assignment clause was never meant to circumvent licensing and broker real estate. There are legitimate reasons for assigning: the buyer takes on a partner and they want to put it into an entity, a family member ties up a property until the other family member can get there to close, a buyer (like myself) wants to put the property into an entity (I have three). In each of these cases, the assignment is not being done for profit, but rather convenience or legal reasons. A person advertising properties they do not own, a person marketing properties they do not own, etc IS brokering real estate. If you cannot assign it you cannot SELL it for another. There are lots of uneducated people, taught the wrong way, that are brokering without a license. Eventually most will get a cease and desist once the state becomes aware of their actions. So, a licensee MAY advertise properties under contract because they are licensed to represent others. Someone not licensed, advertising properties they do not own, is brokering WITHOUT a license. This is relevant to Florida...not other states where the laws will vary. 

I would go with Jay's suggestion. Get an option contract so that you can lock up all 50 of the properties but so that you only have to buy 5 at a time. Or maybe 10 at time. If you don't have the cash, look for a partner. If they're really a good deal, you'll have no problem finding someone to partner with.

What % of the estimated market value do you think he's trying to sell them to you at?

10%? 20%?   And are all the lots of value? Sometimes, these tax guys end up with stuff that is useless to most people (drainage ditch, etc). 

If you can figure out what the portfolio is coming in at overall (i.e. 10% market value, 30%, etc), you'll know whether you can find a money partner or not. 

@Mike H. I totally agree. Option contract with a land contract is the way to go.

Would it make sense to purchase those 5 individual properties with a Land Contract and seller financing of 4% and 10% downpayment? I am not sure how you would do that contractually. 

Originally posted by @John Thedford :
Originally posted by @Eamon Sullivan:

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

 The state cracked down after lots of victims complained to the state. 475.43 is the governing statute. Here is what most people do not understand: the assignment clause was never meant to circumvent licensing and broker real estate. There are legitimate reasons for assigning: the buyer takes on a partner and they want to put it into an entity, a family member ties up a property until the other family member can get there to close, a buyer (like myself) wants to put the property into an entity (I have three). In each of these cases, the assignment is not being done for profit, but rather convenience or legal reasons. A person advertising properties they do not own, a person marketing properties they do not own, etc IS brokering real estate. If you cannot assign it you cannot SELL it for another. There are lots of uneducated people, taught the wrong way, that are brokering without a license. Eventually most will get a cease and desist once the state becomes aware of their actions. So, a licensee MAY advertise properties under contract because they are licensed to represent others. Someone not licensed, advertising properties they do not own, is brokering WITHOUT a license. This is relevant to Florida...not other states where the laws will vary. 

 Advertising a contract is not the same as advertising a property. The wholesaler has the right to buy and is offering that right for sale (if they are truly doing it that way). Are you saying that was made illegal in Florida?

Each set of properties would need to be simple cash sales. 

i.e. You have one contract that details the sale of all 50 and basically says, every month, I'm going

to buy 5 properties (or 10, or however many the seller will let you stretch out). You will pay x amount for these 5 in Feb, x amount for these 5 in march, etc.

I don't think the seller is going to let you stretch out the sale AND do seller financing. Thats where you're going to have to have some money to hopefully buy the first group, sell them quick, and then buy the next batch.

Again, if you don't have the money, I would suggest you find a partner who can. 

My guess is the seller isn't going to let you stretch it out 5 per month. I'm guessing maybe 10 a month. And they may not even be willing to do that at all.

If they're really a great deal, then finding a money partner shouldn't be that hard. All 3 of the land program players have forums where they have some big buyers in there. If you can come up with some real numbers, you can pitch the partnership. Someone will likely be able to take down all 50 at once for the right price.

Originally posted by @Shawn Clark :
Originally posted by @John Thedford:
Originally posted by @Eamon Sullivan:

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

 The state cracked down after lots of victims complained to the state. 475.43 is the governing statute. Here is what most people do not understand: the assignment clause was never meant to circumvent licensing and broker real estate. There are legitimate reasons for assigning: the buyer takes on a partner and they want to put it into an entity, a family member ties up a property until the other family member can get there to close, a buyer (like myself) wants to put the property into an entity (I have three). In each of these cases, the assignment is not being done for profit, but rather convenience or legal reasons. A person advertising properties they do not own, a person marketing properties they do not own, etc IS brokering real estate. If you cannot assign it you cannot SELL it for another. There are lots of uneducated people, taught the wrong way, that are brokering without a license. Eventually most will get a cease and desist once the state becomes aware of their actions. So, a licensee MAY advertise properties under contract because they are licensed to represent others. Someone not licensed, advertising properties they do not own, is brokering WITHOUT a license. This is relevant to Florida...not other states where the laws will vary. 

 Advertising a contract is not the same as advertising a property. The wholesaler has the right to buy and is offering that right for sale (if they are truly doing it that way). Are you saying that was made illegal in Florida?

See 475.43.  

Originally posted by @John Thedford :
Originally posted by @Shawn Clark:
Originally posted by @John Thedford:
Originally posted by @Eamon Sullivan:

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

 The state cracked down after lots of victims complained to the state. 475.43 is the governing statute. Here is what most people do not understand: the assignment clause was never meant to circumvent licensing and broker real estate. There are legitimate reasons for assigning: the buyer takes on a partner and they want to put it into an entity, a family member ties up a property until the other family member can get there to close, a buyer (like myself) wants to put the property into an entity (I have three). In each of these cases, the assignment is not being done for profit, but rather convenience or legal reasons. A person advertising properties they do not own, a person marketing properties they do not own, etc IS brokering real estate. If you cannot assign it you cannot SELL it for another. There are lots of uneducated people, taught the wrong way, that are brokering without a license. Eventually most will get a cease and desist once the state becomes aware of their actions. So, a licensee MAY advertise properties under contract because they are licensed to represent others. Someone not licensed, advertising properties they do not own, is brokering WITHOUT a license. This is relevant to Florida...not other states where the laws will vary. 

 Advertising a contract is not the same as advertising a property. The wholesaler has the right to buy and is offering that right for sale (if they are truly doing it that way). Are you saying that was made illegal in Florida?

See 475.43.  

 Is that a Florida statute? I'm trying to understand why an option is ok but a contract is not. Or do you disagree with the option method too?

@Shawn Clark   I know your asking John.. but I think that is what he is saying.. that if you have a scheme and your scheme is to tie up properties and then advertise them or contracts and make a assignment fee on hud  or out side of escrow that that is brokering without a license according to John

I know in Oregon you can't sell any real estate you don't own.. one of my Vendors got in serious trouble he put a for sale sign in the yard and wanted to flip the contract and he got wrung up.. 5k of attorney fee's and 5k fine and cease and deisist and a lot of stress..

I think it depends on how tight the state is.. but the reality is if you read real estate laws in all states they read exactly the same it just depends on if the state cares and if they are going to follow up.

you don't see many contracts offered for sale with no description of the property whatsoever.

Originally posted by @John Thedford :
Originally posted by @Shawn Clark:
Originally posted by @John Thedford:
Originally posted by @Eamon Sullivan:

@Jay Hinrichs

Thanks for the insight Jay. I agree with you on the risk involved with trying to sell low-end properties. 

Jay I know you have alot of experience "flipping" land. Would you consider this a viable option, without lumber? Do will people really pay a premium for clearing, installing water and septic? What kind of returns did you expect? 

I have a few lots that could fit the mold for nice Mobile Home lots or small spec houses ( $100-120k price range). 

@Maugno M.  read a few of @John Thedford threads. I thought it was legal too.

 The state cracked down after lots of victims complained to the state. 475.43 is the governing statute. Here is what most people do not understand: the assignment clause was never meant to circumvent licensing and broker real estate. There are legitimate reasons for assigning: the buyer takes on a partner and they want to put it into an entity, a family member ties up a property until the other family member can get there to close, a buyer (like myself) wants to put the property into an entity (I have three). In each of these cases, the assignment is not being done for profit, but rather convenience or legal reasons. A person advertising properties they do not own, a person marketing properties they do not own, etc IS brokering real estate. If you cannot assign it you cannot SELL it for another. There are lots of uneducated people, taught the wrong way, that are brokering without a license. Eventually most will get a cease and desist once the state becomes aware of their actions. So, a licensee MAY advertise properties under contract because they are licensed to represent others. Someone not licensed, advertising properties they do not own, is brokering WITHOUT a license. This is relevant to Florida...not other states where the laws will vary. 

 Advertising a contract is not the same as advertising a property. The wholesaler has the right to buy and is offering that right for sale (if they are truly doing it that way). Are you saying that was made illegal in Florida?

See 475.43.  

 Let's just post it. Took me 5 seconds to find.

475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.