All Forum Posts by: Will Barnard

You do not necessarily need to find a fixer to BRRRR, however, one of those "R's" is "rehab" so technically speaking yes but that could be a simple lipstick rehab. The key to this or any RE investing strategy is to buy correctly, which is to say, buy with a discount (equity at purchase). Most deals will not be found on a home in move in condition. Knowing that, your target properties should be those in need of repairs. Hope that answers your question more specifically.

 Driving a car can be risky! Mitigate risk of investing by education, knowledge of your market, and how to source good deals. Your profit is mostly made at your purchase.

Disclaimer: I am NOT getting paid to say this and I receive no financial benefit from BP for my comments below. This is the truth and nothing but the truth.

I attribute a TON of my success in real estate investing to Biggerpockets and the membership here. That said, a lot of that credit has to go to myself (at risk of sounding conceded) as I personally had to show and deliver the drive and determination it takes to come this far. Many, many times in the beginning, I wanted to give up as the failures mounted and my traction did not seem to take shape. But every once in a while, I had a great day and I felt like I was on top of the world and that kept me coming back for more. 

I have made a lot of friends on BP that I continue to stay in touch with, many local to me and others all across the country. Some have been part of my private investor network I built over time, some became partners in deals, and many others taught me things to help me get to where I am. The sheer fact that I have spent this many years and made this many posts enabled me to grow with BP and as such, BP has been a HUGE part of my success in RE. But one must start somewhere, one must finally take real life action, and one must continue to fight the good fight (stay focused, don't give up, always strive to learn new things, always network, and keep pushing the limits of your goals).

Never dictated, though I wish. I suck at typing so you probably have seen many errors, but I have personally typed each of the 15k+ posts. Thanks for your comments and kind words.

 I don't disagree  with anything you have posted here regarding OH laws on brokering. They have some of the strictest I have read to date now. What you are missing is that "wholesaling" can be completed legally if structured properly, i.e. you never publicly market the property, you have intent to close, etc. So again, I will repeat, wholesaling in of itself is not illegal, but most wholesalers I have seen have done it illegally in states with similar rules such as CA or OH.

Here are three examples of a legal wholesale transaction with example one being one of many I did myself way back in 2011-2013 (or so). 

1. Formed a trust, made offer in the name of the trust, I was the trustee and I named my buyer as the beneficiary. I showed a proof of funds (actual bank statement in my company name - which my name on those entity docs matched my name on the trust docs), I had a buyer in place (in essence, a cash partner), and at closing, I fired myself as trustee giving the beneficiary documents to name their new trustee of said trust. I had a trustee's fee on the Hud1 for my "wholesale fee". All of these transactions, the seller was a bank (REO) or the seller was an individual in a short sale situation where bank had to approve the transaction and documents. I never had any weasel clauses to get out of the contract (if I didn't have a buyer, I had the means and intent to close on it and flip it myself). No brokering violations, no lying to the seller, no lying to the buyer.

2. Have a cash buyer lined up in advance, know the criteria of the buyer, go search for that criteria and contract it with a seller. Either form an entity naming your buyer as part owner or write the contract in the name of your buyer. Either way, the cash buyer is real and in place with real POF and real intent to close. At closing, simply sell your shares to your partner for your wholesale fee or in the event you named your buyer in the PSA, collect your wholesale fee direct from them. Never did you publicly advertise a property you did not own.

3. Find your deal and contract it in your name or your entity. Borrow funds to close your A-B. Find your cash buyer (without publicly marketing any property you have under contract). Close the A-B and shortly after, close your B-C - Typical double close scenario. No violations of any laws here.

Here are 3 simple ways to wholesale legally I have outlined showing "wholesaling" can de done legally. The problem is, most gurus and most wholesalers practice and preach locking properties, finding a buyer and assigning the contract. This format of wholesaling is almost always illegal in most if not all states.

 This is NOT accurate always. Many times, if the buyer comes in without representation or is licensed but would rather take a lower purchase price over getting the selling commission, they can certainly negotiate that. Bottom line, for investment properties that are flips, your flip income and your RE sales commissions are taxed the same, ordinary earned income. Since the broker likely takes a bite out, it makes sense many times to take no commission and lower the purchase price accordingly. In a long term buy and hold, upon sale, your income is taxed at capital gains rates so less tax, but the principles above remain, your broker still takes a bite (in most cases - some can get to 100% commissions via caps or contracts, etc.). Financially, dollar for dollar, it is often better to lower your purchase price by the commission saved to seller, seller nets the same. Of course as someone in this thread or another also mentioned, the commission can act as a chunk of cash for your rehab/repairs so in those cases, while dollar for dollar, you may pay more in tax and broker splits, you get much needed capital up front at purchase. This is the MAIN reason licensees who flip would work the deal this way over the other. In the end, there is no wrong answer as everyone's situation is different so pick what is right for YOU.

 That is a very good question, not sure if the law deciphers between current usage or not. I would guess not simply because how could they track usage change (legal or otherwise) to circumvent the law? Great question, I am really not sure of the answer here.

Per my understanding of the CA laws, Junior ADU's can only be done on single family lots and no, they did not waive the owner occupancy law to encourage investment. The law specifically states that in the JADU situation, the owner must occupy either the primary home or the JADU, no exceptions. The law was enacted to increase housing supply, though I think this is not the real answer, just the politicians grandioso ideas.

I've been around here for a long time now and I get asked these questions to help/mentor/pick my brain/you name it. I help when and where I can but the experiences noted above tells it all. Very few stay the course, put in the work and are willing to ride out the emotional rollercoaster of failure X 10, failure X10, failure X 10, win, failure X 10, failure X 10, failure X 10, win.

I give as much time as i can here on BP answering questions and providing feedback and insight from my experiences over the years. I am still here because I have the determination to succeed, the desire to win and the family to feed. Most people give up or drop out and that is the sad truth.

Just to clarify here since this statement is likely going to piss off all the wholesalers on here (plus it is not correct), wholesaling is NOT illegal, but it can be performed illegally, just like driving a car or boat. Drive while intoxicated and it is illegal.

Joe and Jerryl gave great advice above. Wholesaling is essentially a marketing business, it is not real estate investing. As for a mentor, if you can find a local active wholesaler who does a lot of volume and performs them legally, that would be a great find as a mentor assuming they are willing (and to Charlie's point, you should be bringing something to the table too, be it free labor, door knocking on behalf of your mentor, or whatever).