All Forum Posts by: Braden C.

@Bill Plymouth I agree with him and everyone else who sees that as an issue, it's just wrong. I just disagree when I see posts that say wholesalers rob sellers of their equity because they aren't adding value to the property. Adding value to a property after the transaction is complete doesn't benefit the previous owner. If you feel like a wholesaler is robbing someone of their equity, then every investor who buys property at a discount is also robbing sellers. Almost every other point made I agree with. 

I actually do the same thing when presenting an offer, we go over the comps and how I arrived at what I can pay. I haven't seen any contracts with bs fraud and scammer exit clauses so I wouldn't have a good opinion on that. We do a mixture of rehabs/wholesales/buy and holds and have every intention of closing when we go under contract. There are very few times when we have to cancel the contract within the inspection period because we missed something along the way. I don't think anyone who is doing any kind of real volume can say they've never once had to cancel a contract. 

I disagree with not being a benefit to the industry though because again, given the three scenarios I provided you, the outcome didn't change at all for the seller. If a wholesaler can bring me a deal that has enough meat on the bone, it benefits me. If all investors were putting in the same amount of time and money to find these deals, there wouldn't be any wholesalers out there. The 10% or so of wholesalers that are actually doing deals are providing value to the industry, whether you like it or not.  

@Jay Hinrichs I don't disagree with you at all about the licensing and fraudulently representing the value of a property, both are wrong in my opinion and should be addressed. What I still disagree with you on is how you go about reselling a property. If I KNOW that I am going to resell a property to another person, why would I want to own the property for a few days when I could've simply assigned the contract to begin with? It in no way changes the outcome of the original seller but it does cost me money to close then resell. Maybe you have never or would never assign a contract for some type of business reason, but I interpret it often as you feel like it's just simply wrong to do. Am I incorrect in that interpretation?  

Thank you for responding. So are you against anyone buying a property from a seller who isn't represented by an agent and marketed on the MLS?

@Jay Hinrichs and @John Thedford - You two always stand out to me in these threads because you always participate and give thorough answers to posters. I agree with both of you that if someone chooses to wholesale, they should have a license. 

One thing I have noticed both of you post in the past is that you have a problem with wholesalers stealing equity from sellers because they don't add any value to the property. Jay, I believe earlier in this thread you said you have no problem with someone closing on a property and then immediately reselling it but you would never, and have never assigned a contract. My question is, how does adding value to the property by rehabbing or closing first help the seller in any way? Here is a scenario...

Please assume that we're talking about the same property for each scenario.

- An investor buys a property for $50,000, closes on it and pays closing costs then immediately resells the property for $60,000 to someone else. They net somewhere around $8,500 because they paid some closing costs and probably had it insured for the small amount of time they owned it. 

- Wholesaler contracts a property for $50,000, assigns it to someone for $60,000 and nets a profit of $10,000.

- Rehabber buys a property for $50,000, spends $30,000 to rehab it and after three months he resells it and nets a profit of $25,000.

All three scenarios have different outcomes for the investor/rehabber/wholesaler but they're all the same outcomes for the seller. Adding value to a property doesn't benefit a seller, it benefits the rehabber. 

What are your thoughts on this? I agree with almost everything you both say on the subject, but I can't seem to come up with my own good answer for this argument and I would love to hear yours.    

If you got a mortgage around 2006 you know that basically all you needed was a pulse, getting a real estate license is just a tad bit harder, but not much. Just get the stupid license, disclose to sellers you have a license, act ethically and within the laws, and make money. There are always going to be shady realtors, slumlords, cut corners flippers, predatory lenders, and crooked wholesalers. 

This thread is a lot like talking politics at a party. We have the extremists on opposite sides who are the loudest, most obnoxious and the middle of the road people trying to be logical and see both sides. Lets all take 30 seconds for some self-reflection...

When I read the original post my initial thought was "$500/mo for four units, something is leaking", glad you got it fixed. 

Stabilizing properties isn't a fun task but it's usually why you got a good deal and where you have the ability to add instant equity. One of my favorite conversations from an inherited tenant once went like this...

Him- "You can't be coming in here and all of a sudden making up all these rules."

Me- "I am not making up any rules, I am simply enforcing what's in your lease. You can't just pay rent whenever you feel like it."

Him- "Well, that's not fair." 

What is your landlord doing about the problem? It could be several different issues but ultimately you shouldn't be concerned about them. 

Septic systems aren't that complicated, if waste is getting out you have a leak or an opening somewhere. Are your cleanout and man covers properly sealed? Do you know when the last time the tank was pumped? Is there possibly a filter in the tank that hasn't been cleaned in a while? 

@Donald Walker You've already lost motivation? Before you even started? I am not in Arizona, but I'll give you some advice, don't waste your money. If you aren't ready to absolutely grind and turn over every single rock in hopes to find a deal, you won't last in wholesaling. 95% of those who get started wholesaling fail, and they're motivated! I am not trying to get you down but I don't want to see anyone waste their time or money. 

If you somehow find the motivation again, I would get your license whether you wholesale or not. In my opinion, all wholesalers should be licensed but I know most aren't. Good luck and I hope you find something you will enjoy doing! 

More than likely just put in there to help educate potential buyers that might not know that a tenants lease doesn't just terminate because the property is sold.