All Forum Posts by: Will Barnard

 Right back at you Jerry. Always nice to see you around the site. I hear what you are saying and the best I can offer on that is to "report" any post that you deem as flaming or attacking or any post that violates our forum rules. We moderators do our best to take them down but many slip through the cracks as the population of this site has grown so much. There are bad people in all areas and walks of life, something we have to deal with. I agree that new members may never come back after some comments returned to them and while that is disappointing, people need to have a tad thicker skin in the real estate industry. You get no after no and doors slammed in your face, you have the inevitable emotional rollercoaster throughout your career and those who stick with it and perceiver as you have, you end up with more ups than downs! Fact of life.

To those who violate the rules and attack others, I can only hope that their posts are reported to the moderator team and we handle them accordingly. That may be simply removing their post and issuing a warning, it could be a cooling off period, or it may even be permanent removal from the site. Those are the penalties BP has the power to process.

Duane, he stated "most" not all sellers are not sharp when it comes to real estate transactions. Ask the average person and they have no clue how to properly work a CMA to come up with a property value, what disclosures are needed to sell a home, or the ins and outs of the transactions full circle. Judging from all your argumentative replies and justifications in this thread, it is safe to say you will do the same here on my post but let me take a shot anyways. . .

Your license is "REQUIRED" by law in GA to do what you are doing, end of story. Regardless if you hate NAR or think you don't need it, you are required to have a license to operate your business. One call from one person to the authorities and you will find out real quick I am correct. It is not "just a piece of paper" and comes with education, tools, and continued education. It also comes with a promise (from the licensee to provide a fiduciary duty to his/her clients. Spin it any way you want, but you have none. This is not to say you are unethical in any of your transactions as I have no personal knowledge of your dealings other than what you posted in this thread. You have stated you have worked with experienced investors and previous agents and that is fine, I can say with confidence that the majority of wholesale transactions from you or anyone else does NOT come from such sellers.

Wholesaling RE is NOT "investing", it is a marketing business and most perform it illegally - brokering without a license. I have said it at nasium throughout BP threads - wholesaling is like driving a car, the act of driving or wholesaling is not illegal in of itself, however, you can perform the operation of a car illegally (speeding, running red lights, driving while intoxicated, etc.) and you can perform wholesaling illegally by negotiating a price and contracting said price with a seller, marketing that property, locating a buyer and receiving a fee for it (that is brokering without a license). You can also wholesale legally by closing on the deal with your cash or borrowed cash, then find a buyer and selling, nothing illegal about that but most don't do it that way because they DONT have the money or borrowed funds, it cost to much to do two transactions, and a host of other reasons so they continue to illegally perform the transaction. There are several other ways to perform such transactions legally. I have wholesaled somewhere around 15 times or so, albeit almost a decade ago since my last one, and at no time did I ever violate the brokering laws in CA. I accomplished each transaction by finding the deal, already having real buyers ready to go, formed a trust and vested my offer in the name of my trust with myself as the trustee and once the offer was accepted, I named my buyer as the beneficiary. At closing, I simply filed paperwork firing myself as trustee and naming the buyer's new trustee for my fee. I sold my trust, never publicly marketed the property, and in all cases, the seller was a bank (REO property). Certainly the bank should be "sharp" to understand real estate values and they were the crooks to begin (who helped cause the crash of 07-08).

@Jerry Puckett mentioned my "The Truth About Wholesaling" thread and it is a long but good read. Especially the first 5 pages or so. Jerry was new then as he eluded to. He took my thread as a wholesale bashing campaign. After some explanations from me, he realized, as did most others, that the intent was to educate on how to do it right, not to bash. Yet so many come to BP with the inclination that wholesaling requires no capital, little effort and big riches. Most of us here know that is not true and just a pipe dream. Some may get frustrated with the same questions over and over and others get frustrated when the answers are met with arguments from an inexperienced party to a highly experienced party. It's like a patient (with zero medical education) arguing with a doctor on his/her prognosis because the patient googled it and paid to attend a webinar.

I am one of many that get frustrated with the high and mighty attitudes of some wholesalers who refuse to get licensed or refuse to listen to reason stating "they don't need a license". What is most frustrating (at least around here in So Cal) are the overly excessive greedy wholesalers who will lock contracts (and sometimes they are not even locked), mark up the price by $80k and attempt to rape someone, these people have no risk, put up little to no money and when they cant get that price, they send it back out with a "price reduction" email blast. They didn't get a price reduction from the seller, they just reduced their obnoxious price to a lower obnoxious price. Others show rehab numbers of $50k when in reality, its $100k (I know, I know, it is not the wholesalers responsibility to provide the rehab numbers - I fully disagree). Wholesalers (most, not all) want to take no responsibility, have nothing on the line, hold no duty to anyone but themselves, and expect glorious fees for it. This is frustrating to most experienced investors and when we attempt to educate them here on BP, were are called wholesale bashers.

 Questions: What source are you referencing that shows wholesaling will be gone in 3 years? I find that not possible.

Wholesaling is practicing RE without a license - In many cases, yes, not in all cases. There are ways to wholesale RE legally and without a license and there are many more ways to do it illegally. Just like driving a car, it is not illegal to drive but you can perform it illegally.

No meat on any bones - That is a broad and bold statement, while I agree with you that the market conditions in AZ are fully on the side of sellers not buyers (this is the case in most areas across the country and even more prevalent here in So Cal), this is not to say that there is no such thing as a deal, you just have to get creative and go after more quantity to land that one deal.

Your list statement - absolutely true! Your Mother statement - I see many where this is true. I just had a wholesaler send out a deal where it was a 2 week escrow all cash with an $80k mark up on a home under $1M. That is over an 8% fee! Now the fee is down to $30k and still not a deal at that price. Too greedy!

That is tough to say, but no matter which investment or business strategy you intend to go with, focusing on education for that focus should be your #1 priority. Wholesaling is a business, it is not investing. If you want that to be your focus, learn your market, the numbers, and the legalities of performing your transaction (both morally and legally). Buying and holding RE should be just about everyone's goal as flipping or wholesaling income stops once you stop and holding is one of the greatest hedges against inflation, especially when responsible leverage is applied.

If those numbers of yours are accurate, that is one hell of a game winning grand slam walk-off homerun to win the world series. How ever did you get such good numbers in what is the most competitive sellers market in our lifetimes?

 I have heard this same (or very similar) explanation several times in the past. I question it as it seems impossible to conduct business this way. First off, if you as the wholesaler do not know what the rehab numbers should be, how can you possibly make a confident offer to a seller? As a flipper, you need to know 3 main things before making an offer. 1. The exit value 2. The rehab numbers 3. The local market conditions. Without knowing those 3 things, you are adding risk that could otherwise be mitigated. If you know the exit value number and the ask price from seller is X, without knowing how much you need to put into the deal to get it to that exit number, you can't make the offer confidently. I realize some investors will have lower or higher materials and labor costs depending on their skill level, buying power, experience, network of contractors and sub contractors, etc. but you certainly need to have a decent handle on an estimated rehab budget and at bare minimum, a scope of work identified for others to price in their own rehab numbers.

Where I have been frustrated time and again in dealing with wholesalers is their standard boiler plate numbers. So many times I would see wholesalers list just about every one of their deals with the same exact rehab budget. Obviously it was just a plugged number and does more of a disservice than it does help anyone.

Yes, my company does it all.

Every site is different and costs will vary depending on existing conditions, length of new sewer line run to street (required) finishes, etc. The more sf you build, the less per sf, same as buying a 6 pack vs 12 pack.

Correct, it was expanded. Process is about the same to covert existing or convert and expand. Either way, you need architectural designs and structural engineering along with LID, title 24, and other items submitted to Building and Safety for plan check review. Keeping it under 750 sf avoids impact fees per CA state law which saves money.

ADU laws for CA are state wide and cities may not make the requirements more difficult, however, they can ease them.
detached garages are the best for ADU conversions. I have extensive experience in this area and can tell you it is the best investment for buy and hold right now. Since you already own the dirt, converting or building an ADU adds only the soft costs and construction costs (which have gone up considerably over the last 6 months).

Just finishing one up in Sherman oaks right now which was a detached 350sf garage that was converted to a 750 sf 2 bed 1 bath plus laundry ADU. Came out great! I will be posting photos of it on my profile once it is 100% done. My client is very happy with the results and will be even more when he gets his new tenants in there.