All Forum Posts by: Braden C.

One piece of advice I will give you, there are no shortcuts. Wholesaling is often sold as the quick and easy way to get into real estate without using any of your own cash or credit. Hundreds, if not thousands, of people come on this board every year looking to get rich quick, I would guess that 99% never do a single deal. All of your questions have been answered numerous times on these boards, take the time to research. 

Almost all of these "free" seminars are just a ploy to get you inside the room with a couple hundred other people so they can find 4-5 suckers. The suckers will sign-up for the "mastermind" program and pay tens of thousands of dollars. Everyone and their brother wants to be a real estate investor right now so the guru business is booming.  

That being said, I met a gentleman recently who has done extremely well with real estate and has built-up quite an impressive portfolio. He told me he would go to any seminar he could because during the free portion, he could always pick up one or two little nuggets of information. 

I would go and see if you can learn something new during the free portion. Leave your credit cards at home and don't be tempted by the sales people.

If you take away your personal opinion, media bias, stories, and/or experiences and just look at the statistics then you should be able to make a pretty easy decision. 

I know each market is different, but I've found over the years that paying a little bit extra for a letter has a far better return than a postcard. Depending on volume, expect to pay $0.60-$0.89ish per letter which includes your postage. 

For me, I need my mail piece to do two things. 1. I need the recipient to open the letter, so I use a really good handwritten font and will also change up the color of my envelopes from time to time. 2. I need a strong enough message that will get a motivated seller to call me. If my direct mail accomplishes those two things, the rest is up to me in order to get the deal.

The latest trend is putting a google maps image on the postcard, so everyone is doing it. If everyone is doing it, do something else. 

I had a really good experience with Pad Hawk but ended up cancelling after a few months because I didn't get enough use to justify the $99 a month. When I cancelled it was quick and easy and I didn't get hit with any other charges. Sorry to hear you had a bad experience but I don't think it's normal. 

@Tiara B. read what @Jason D. wrote, read it again, and then once more. Wholesaling is often sold as a quick and easy way to make money but the reality is that it's difficult and takes money and time to get started. I fix-and-flip and have rentals but the majority of my business is wholesaling simply due to personal preference of the business model.  I would never recommend getting started with wholesaling as a side gig or without sufficient working capital. Like Jason said, you might be that 1% who doesn't fail, but the odds are entirely against you. 

Did they give you a reason why they want three days after closing? My only guess would be they need the funds in order to move. You could always have an escrow holdback for a large enough amount where the risk makes it worth it to you, but if there is a dispute that money could be held up for quite a while and a lot would just go towards attorneys. I like @Bill B. idea of paying for storage for them and then you getting reimbursed at closing when they are getting their funds. 

I've had this situation happen before where the seller had no money for a new place to live so we held back $5k that was to be released once he vacated the premises. The attorneys wrote up the agreement that made me comfortable and he ended up being out within a couple of weeks. I was also getting a very very good deal on the property so even if I had to evict, I'd still be happy (he couldn't trash the place any more than what it already was). 

@Kevin Gregg Who actually owns it? Did he put it in his name or did he just never buy a property? How do you know the P&L statements are fake? Have you been receiving any kind of monthly/quarterly payment? There isn't much information provided, but certainly seems like fraud to me. I am pretty good at researching properties and their ownership so feel free to shoot me a PM with the address and I can look into it for you. 

I'll preface this post by saying again, the agent should be fired and possibly lose their license for listing the property on the MLS and representing it as being owned by themselves or their investment group.

With that said, I think the OP is way off on a couple of points he is trying to make. First, the wholesaler saw an opportunity with an underpriced asset and jumped on it. If your buyer saw it at the same price as the wholesaler, would they have emailed the listing agent and insisted on paying $75k more because that's what it was worth to them? The wholesaler did a lot wrong here, but contracting the property at the price they did wasn't one of them. They went wrong when they tried to represent themselves as the CURRENT owner. Had they just disclosed they have it under contract and are wholesaling it, it probably wouldn't have been a big deal for most logical investors. 

Second, the argument that wholesaling is wrong because they aren't adding any value to the property and stealing equity seems flawed to me. When I make improvements on a property that I buy, I am adding value for myself, not the former owner. If MY profit drops a bit because I paid the wholesaler a fee then that hurts my bottom line, not the former owner. Here is a real life example of my point: 

Seller approaches me with a property they want to sell and are asking $X. I run my comps, take a look at the property and decide it's a good deal so I agree to the price. 

Scenario 1- I spend $50k and do a rehab, list the property and make a nice profit

Scenario 2- I spend $30k to make the property a rental, find great tenants and cash flow from day 1

Scenario 3- I close on the property, list it on the MLS as-is, make a profit and move to the next deal

Scenario 4- I wholesale the deal to a cash buyer, make a small profit and keep looking for deals

Each scenario is different and each has a different exit strategy, but seller is still receiving $X for each and every outcome. So saying by wholesaling deals you're stealing equity from a seller because you aren't adding any value to the property doesn't hold up for me. You only add value for yourself, it doesn't benefit the seller in any way whatsoever. 

Third, the OP failed his buyer big time as an agent. You had a buyer with a lot of interest on the property, all you had to do was keep an eye on it and he would've not only got the property but he would've got a great deal on it. You openly said that the deal had been on the market for a while and you missed it; that's your job! I am not sure about your MLS, but on mine it takes me about two minutes to setup property alerts so the second something hits the MLS I get notified. If you really wanted to go above and beyond you could've checked county records weekly, found out when the bank took the property back, cross searched the specific bank with other properties and found the handful of agents they use to list their properties, reached out to each one and said "hey, if you get this asset can you call me so we can put in a very strong cash offer the day it gets listed?". But you didn't do any of this, you let the deal go to someone else and now you're pissed. You have every right to be upset at the wholesaler but man, I would be super disappointed with myself if I was you. I would use this situation as a way to improve yourself as an agent.

As a broker, I would get rid of that agent immediately. You have every right to be frustrated and I would take the time to report the agent and the broker to your state licensing board. That being said, you have no right to cancel the sale between the bank and the wholesaler and the bank probably doesn't either. I would be really surprised if the bank cancels the deal or if they even have a right to.