All Forum Posts by: Allison Lane

Thank you for sharing your opinion @Eric Pinter. It is always nice when people can discuss a topic like adults by calling people names when we don't agree. :) 

Anyway, like I said, my post was from my perspective knowing how I have helped people. I am in no way stating that all Realtors are bad or that all wholesalers are good. I am merely pointing out that both have pros and cons and bring up a few questions about the system that I believe can be improved. 

@Jacob White

From my perspective, as someone who has wholesaled properties, there are pros and cons to the practice. The cons do not apply to all wholesalers or wholesale transactions while the pros are universal when a wholesale transaction is correctly executed.

Cons: 

1. A property can only have one contract on it at a time. If the property is encumbered by a contract a wholesaler does not have the intention or ability to close on, the property is not available for contracts from individuals who may actually be interested in purchasing the property. 

2. Con men. A decietful wholesaler who leads a seller to believe they are purchasing the property and does not explain that someone else will be purchasing the property can leave the seller angry and feeling lied to.    

Pros:

1. Quick close. When a wholesaler has a buyers list they are often able to help a seller close on the property within a matter of weeks. 

2. Seller has options. When a wholesaler educates the seller about the process and the seller's other options - including listing the property with a realtor - the seller can make an informed decision as to what is right for them and their property. 

3. No "showings". A wholesaler with an active buyers list can send a property to multiple individuals thus avoiding having to keep the property in "showable" condition. 

4. Seller decides the terms. A wholesaler can help the seller create terms that will benifit them and their situation while keeping the situation private and avoiding lengthy negotiations. 

I am sure other people can come up with different pros and cons but that is my list based upon my experience with wholesaling and other wholesalers. I do think the practice has its positive points and can be very helpful in certain situations but it can be harmful when someone does not abide by ethical standards..... 

I am not sure how how being licensed corrects ethics though. Ethics are personal. They do not suddenly materialize because someone has a license. Frankly, I think the whole RE system is broken. Why is it okay for a Realtor to put a contract on a property with a buyer that has not been approved for a mortgage? When the buyer backs out 5 weeks later because they could not qualify, the property has been tied up for weeks and missed other potential buyers while it was encumbered with the non-performing contract. This can be very devistating for a seller and is no different than the wholesaler who cannot close on the property. Also, why is it okay for Realtors to put a sign in the yard then list the property on the MLS simply to hope and pray another Realtor will bring a buyer so they can get paid? Or for a realtor to tell a seller their property is worth "X" just to get a contract then tell the seller to drop the price thousands of dollars a few weeks later because the proerty is overpriced? These practices hurt sellers just as much as a bad wholesaler. I don't say these things to make people upset, but to get people to think about the system and how it could be improved. It needs more than just laws targeting a few individuals who don't have an RE license.

Is this what you are referring to? 

*SRC062*

01-12-2017 09:53:17 SRC062
State of Arkansas 1
91st General Assembly A Bill 2
Regular Session, 2017 HOUSE BILL 1163 3
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By: Representative Rushing 5
By: Senator L. Eads 6
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For An Act To Be Entitled 8
AN ACT TO CLARIFY PROVISIONS CONCERNING REAL ESTATE 9 LICENSE EXEMPTIONS; AND FOR OTHER PURPOSES. 10
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Subtitle 13
TO CLARIFY PROVISIONS CONCERNING REAL 14 ESTATE LICENSE EXEMPTIONS. 15
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 18
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SECTION 1. Arkansas Code § 17-42-104(a)(1), concerning exemptions, is 20 amended to read as follows: 21
(a) This chapter does not apply to: 22
(1) A person not licensed under this chapter who performs any of 23 the acts described in § 17-42-103(10) with regard to the property owned, 24 leased, or purchased by him or her; as: 25
(A) An owner of an individual freehold or leasehold 26 interest in real estate; 27
(B) In the case of a corporation, limited liability 28 company, limited partnership or other entity recognized by law holding a 29 freehold or leasehold interest in the real estate under subdivision (a)(1)(A) 30 of this section, a member, manager, partner or officer, who has authority to 31 and does make management decisions affecting the overall policy of the entity 32 regarding real estate activities involving only the interest of the owner; 33
(C) An individual attempting to acquire for his or her 34 personal use a freehold or leasehold interest in real estate; or 35
(D) In the case of a corporation, limited liability 36
HB1163
2 01-12-2017 09:53:17 SRC062
company, limited partnership or other entity recognized by law, intending to 1 acquire a freehold or leasehold interest in real estate under subdivision 2 (a)(1)(C) of this section, a member, manager, partner or officer, who has 3 authority to and does make management decisions affecting the overall policy 4 of the entity; 5
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SECTION 2. Arkansas Code § 17-42-104, concerning exemptions, is 7 amended to add an additional subsection to read as follows: 8
(c) A person or entity shall not under any circumstance qualify for an 9 exemption under this section if the person or entity: 10
(1) Obtains an equitable interest in real estate with knowledge 11 that the interest was obtained on behalf of a person or entity that intends 12 to gain an interest in the real estate; or 13
(2) Strategically circumvents the requirement for licensure 14 thereby eliminating remedies available to consumers through the commission.

Foreclosures are a good option but keep an open mind. There are also good deals with HUD, Home path and Fannie Mae. And, next time you are in the area look for "we buy houses" signs or advertisements in the area. Call those wholesalers and tell them what you are looking for. Let them find you the deals, too. Remember, you make your money when you purchase the property. Not when you sell it. Being new, double check your numbers and run your deal buy more than one person just to make sure you're buying right and your rehab numbers are correct. You want to make sure you are going to make a profit after holding cost, rehab cost, the cost of your money, and closing cost are all paid. New people often forget some of these and that ends up costing them their profit. Best of luck to you!

@Andrew Johnson has a good point. In central AR you can buy a rent ready home for less than $40k. Your tenants will be low quality and you will be replacing/ repairing every time one moves out. But, you can also purchase homes that are in good areas with good structure and in need of updates for $50-$70k. After updates, the home may be worth $110-$120k. As a landlord you don't need to update to the same level a rehabber does so these homes are the ones I would shoot for. They rent higher, have more equity, are easier to sell, and attract a better quality of tenant. North West AR is a great area for investments as well. If you can close to the university, you will always stay rented. 

A survey is only a must if  you believe a neighbor or someone else is encroaching upon your property. For example, we Were purchasing a property and the neighbors had their fifth wheel parked on it with a friend staying in the camper. In order to make them move the camper, we had to get a survey and prove that the land was part of our property. We have had similar issues with another property and driveway a neighbor claimed because the property had been vacant for so long. The realtor explained to us that if we did not get a survey and the neighbor stayed on the property for more than seven years they, under the squatters law,  could file for claim of the property. I'm not sure it would actually be enforced. But since we were flipping the properties, we opted to have the survey in both instances and forced the neighbors off the property. 

We do not have a survey for each property; but like @Susan H. said, in some situations they are necessary and helpful. 

Check out the investors group at www. CARREIA.com. There are a lot of local investors there you can network with and get some ideas of how to use your skills. Next meeting is Thursday night. Hope to see you there!

Look for 'we buy houses' signs in your area and call those wholesalers. Let them know what you're looking for and  they will send you properties that fit your requirements. 

I do know one wholesaler out there. If you want his information private message me and I will send you his number.

Stacy at West Little Rock Title will provide great customer service to your clients and will close wholesales deals. 

Hi Josiah,

The Christmas party is always a good time. We look forward to meeting you!