All Forum Posts by: Andrew Michael

@Kelvin McLaurin

Go find an experienced wholesaler or investor in your area and JV this deal with them. This is not meant to be offensive but based on the paragraph above you are nowhere near being ready to do this deal alone. The key to having a long successful wholesale career is educating clients, building a network, being transparent with all parties involved and having the ability to identify and solve client issues.

If you do not have a purchase contract and an assignment contract in place chances are you do not have the network and structure in place to see this deal all the way through closing.  I would suggest partnering with someone on your first few deals so you can get a grasp of the process.  Getting a percentage of a few deals is better than closing none at all. 

@Katorey Fields

I would recommend you go to an attorney and have them draft up your contracts.  There are tons of free ones floating around but its important to understand your contract and the terms within.  I have never heard of a title company providing contracts.  I would go to an attorney or agent before I ask a title company.  

The signing of contracts takes place between you and the seller/ end buyer.  This happens virtually anywhere you and the other party can meet.  On the front end, this is typically done at the subject property.  The assignments can be anywhere or even via email.  

The closing process happens at the title company unless you have worked out some sort of remote closing.  

Based on the questions you are asking I would highly recommend teaming up with someone for your first few deals so you can get a good grasp of the process.  After you have a few closings under your belt you can venture off by yourself.  If not, be sure to get an investor friendly title company or someone who will look out for your best interest throughout the process.  If you let a savvy seller/buyer take control of your closing you will be in jeopardy of being cut out of the deal.  

Lots of things to look for when buying from wholesalers but many of the issues I am going to list will be eliminated when working with a reputable wholesaler.  There is a BIG difference in working with a well seasoned wholesaler vs someone who is assigning their first contract. 

First and foremost I would ask to see a copy of the original purchase contract.  Make sure they actually have the property under contract, the contract is assignable and the terms in your assignment contract match that of the original agreement.  A newbie will probably push back on this fearful that you will see their original purchase price.  A seasoned wholesaler will not care about the fee or redact the information.  For seasoned wholesalers there is always another buyer in line to buy the property.  

The pro's of buying right from a reputable wholesaler should be you are getting a discounted property, quick closings and you get the opportunity to form a relationship and have a steady flow of off market deals. 

The cons, typically you will pay both sides of closing costs, you are buying the property as-is so you have no recourse should you later discover unforeseen issues, wholesalers can mislead you with false information, a bad wholesaler will probably conduct a messy and confusing closing transaction and the wholesaler may have mismanaged the sellers expectations in which the blame or frustration could be aimed in your direction since you are the end buyer.

Again it all goes back to the wholesaler and how they have managed the process from start to finish.  A good wholesaler can be a huge asset to your pipeline and will be transparent with all parties involved.  This leads to a pleasant transaction for everyone.  

Bad wholesaler, and most of them are bad, causes a tremendous amount of unnecessary issues. 

The most important piece is to do your own due diligence and understand what you are buying.  Do not rely on the wholesaler for information, its up to you to vet the deal and make an educated decision.  

Matt Theriault touches on all of these topics quite extensively throughout his podcasts.  

I divide due diligence into two main categories.  The borrower and the asset itself.

Borrower:

Your credit (are you a trustworthy borrower), are you capitalized enough to float this project/ cover the debt, track record (borrower/ contractors experience).

Asset:

Comps (as-is & ARV), LTV metrics (lender can help verify these if you have questions), detailed budget and scope of work, tentative schedule, exit strategy.

Of course any lender/ partner will dive in a little deeper after the initial pitch but if you have all of the above ready for your initial conversation it will go a long way in getting deals approved/ partners on board.

@Jared Noetzel I would try to track down the owners number directly.  Assuming you are renting in DC there are even rights you have as the tenant should the owner decide to sell (although TOPA is currently going through changes as we speak).  Also, I don't know that I would volunteer any extra information to the owner.  He does not need to know your plans for the property per se.  I would just say you are interested in purchasing the property and see where the conversation goes.  

DC is certainly an expensive market but there are still tons of deals to be had here. I have many clients that are utilizing the BRRR method in our market. Tons of hard money deals and off market deals being traded on a monthly basis.

I think the best thing you can do is begin networking, going to meetups, joining FB groups, etc so you can get more exposure to players in this market and have a better funnel for deals.  

What does the original contract say regarding who pays closing costs?  Your assignment should reflect the original agreed upon terms.    

Is this just a general question or do you have a specific project in mind.

There are tons of developers in MD from national guys all the way down to the spec builders.  Is this a lot or land, has this ever been build on, what size home(s) can be put on the lot, are there already utilities hooked up, is it raw land, does it need to be cleared, shovel ready, zoned correctly, does it need to be subdivided.... the list goes on. 

Need tons more info before one can realistically recommend anyone.  

@Daniel Pitta there is no magic answer here or secret formula. This is years of networking, flipping, lending, wholesaling and building relationships in DC, MD and VA. The longer you stick around the more opportunities you will be presented with. Most of my deals at this point are products of people who do not have systems or processes in place and need help with negotiations, contracts, finding buyers, title companies attorneys, etc. I will either JV with them or pay them the fee they are looking for and take over the deal from there.

My organic deals are much the same.  At this point all of my friends and family know exactly what it is I do.  Be sure to brand yourself this way, referrals should be a big part of your business.  In addition I also do mailers, have a really good follow up system with past clients, cold call, build my own lists, etc.  

If your looking for specific criteria to target there are tons.  Divorce, probate, absentee owners, tax delinquent, equity position, age.....

Platforms I Utilize:

Marketing/Prospecting - MLS, Craigslist, FB, Zillow, BP (I have easily done 20+ deals due to BP), Jerry Pucket Mailers, Open Letter, Remine,

CRM - Hubspot, Microsoft Dynamics, Excel