All Forum Posts by: Will Barnard

Welcome to BP Nation Kendall. Your goals are admirable and obtainable with effort and determination, you know, similar effort & determination you took to get educated to be a nurse and get your job. Congrats on that and your baby. My daughter is a nurse at UCLA so I know the effort it takes to get there!

My best suggestion for you is to first figure out which strategy in real estate you would like to work with and then go all in on educating yourself and building your team for that strategy. Keeping in mind your work schedule, choose something that fits your time availabilities and desires, not just one that gets you closer to the end goal. Good luck and stay active here, it will be very beneficial.

One last note, when starting out, it can be an emotional roller coaster, one day you want to give up and the next you feel like you are on top of the world. Stay the course.

First step is to start researching and educating yourself on the strategy of your choosing. Nobody is going to give you a step by step playbook from start to finish. You need to put in the effort to get your ball rolling. If you are a hands on learner, I suggest going to work for a developer or contractor that works with developers so you can gain hands on experience. You should also be looking into speaking with lenders for capital, agents for deal flow and listing your flips, and researching your market to lean all you can about it. 

Destiny, this comment, while probably true 95+% of the time, it assumes that all "wholesalers" broker without a license which is just not true.

To answer your question, yes, I have, but never as the buyer. As the wholesaler, I transacted about 10 or so wholesale deals way back in 2010-2014 and ALL of them were bank owned properties. That opportunity is not as easily available today as it was then. None the less, I did not have to use any clauses to back out if I didn't find my buyer, I had the means and intention to close in the event I did not wholesale it and my buyer received a property at a fair price with plenty of meat left for them. I did not take advantage of or lie to any seller/owner as the owner was always a bank (institution) and the reason they owned it in the first place was out of greed giving a loan to someone who likely could not have afforded it under normal lending criteria today.

In all cases in which I purchased from a wholesaler or was presented a deal from a wholesaler, never did I ever get an accurate rehab number (I would consider anything in the ballpark of 10% as accurate), I never got a true exit value (I was always given a pipe dream or best case scenario on the value), the comps used - 80% of the time, there were comps that were not actually comps (comparing a 1500 sf 3+2 with a 2500sf 4+3 as an example, or a comp in a completely higher end neighborhood even though it was within a 1/2 mile).

WOW! You actually stated on a public forum that the majority of your process is to lie to sellers? This statement above is the EXACT reason why wholesalers get such a bad name and ripped on all over this site. Statements like this are so bad, in so many ways.

Using BS contingencies to get out of a contract because you cant find a buyer in time is sleazy and hurts the industry. You are also brokering real estate without a license doing the above. All that AND you are also immoral. Not exactly a business I would want to own! 

2 thumbs down for the posts above!

Not sure why you are looking for wholesalers or what your primary strategy is, but contacting agents should be easy and then tell them your criteria. Having a search done for who the top selling agents are in the areas of your choosing is easy to get. Doing direct mail, SEO your website and a handful of other resources can get you deals.

Wholesalers (or those who claim to be) are a dime a dozen, it took several years to get my inbox from receiving so many of them. They are not hard to find, finding a good one is an entirely different story. Reach out to Jerry Puckett here on BP, he is a wholesaler worth his salt!

Are you new at this? If so, driving for dollars is a must for one main reason over all others - you get to learn and know the inner most details of each neighborhood while searching for your deal. You may or may not have better results with other systems, but when starting out, this is what I would suggest for any starter, not just for wholesalers but for flippers, buy and holders, etc.

 If you know the business inside and out, why not get licensed and get legal double ended or triple ended commissions? You list, you have your rehab buyer you represent and you re-list on their exit. 3 commissions for finding one seller! AND all legal in any state.

Finding ways around the legalities shows just how bad this industry has become with all the gurus selling their crap to wannabie wholesalers and the desperate for what they are told is quick and easy cash. BS

Clearly you have not been speaking to quality realtors. Most quality agents WILL love the opportunity to list a fixer upper. They have a much higher chance of double or triple ending the commissions with such a listing. Find a rehabber to double end it and perhaps get the re-list on the backend. This statement that homeowners prefer to sell their "in need of repairs" homes to wholesalers over real estate agents is hilarious (and not accurate).

Look up many of my previous posts, I have explained this in full detail several times before. Basically if you have your buyer up front, you simply form a new entity or trust and name your buyer as one of the partners (in the case of a trust, a beneficiary). Then simply have a contract to sell your shares of the company for your fee.

A few other things to point out in your post:

1. 15% operating costs of gross rent is WAAAY to low! PM fees alone would amount to half of that. Also, many ADU's do not have separate meters for all utilities, therefore, the landlord will likely be paying for some of them like gas. Electric can easily be metered separate and water can have a sub meter by your plumber (which would require the effort of someone reading that meter each month on behalf of the owner to bill the tenant back. It is really not worth the high expense to add a new gas meter and a separate water meter with the utility providers as the cost is not justified.

2. The garage conversion estimates can fluctuate dramatically depending on the site conditions. I just bid one in the San Fernando Valley that was under 400sf and the price was over $130k. The location of the existing gas meter, electrical panel, and water mains along with how long the sewer line connection to the street will be. Also, what is in between the utility connections and the garage makes a big difference. If it is all hardscape, then saw cutting the hardscape, removing and filling back is an added cost as opposed to if it is soft scape.

3. I will also concur with Dan above regarding the valuations (appraisals) after completion, however, I will also state that the values are less of importance starting out expecting them to catch up down the road when there are more comps to properly value these units. The cash flow to return the investment is what is of greatest importance for the first 5 years+.

Real world example - Did a garage conversion with addition for a client on a 750sf ADU. He is getting $3k in rents (2 bedroom) and only pays the gas bill. His cost was $165k (today it would be closer to $190k). Using a 25% operating expense ratio (which would include a vacancy factor) he would net around $28k annual income. So his investment capital would be returned in 5,9 years! That is a very good return, of course not passive.