All Forum Posts by: Christopher Brainard

@Brad James

Based on what you've said, I would think that you would be able to get a loan from a community bank after they review your situation. Call around, find out which community banks have commercial lending departments, spend a day and hit them up one by one. Have a professional presentation of your assets and liabilities and a detailed plan. You'll run into some 'No's, but I have a feeling you may find that important 'Yes'.

-Christopher

@Brad James

I'm not the right person to answer this question for you, but I'll provide some input. 

I believe the other person is suggesting a credit union (or any community bank), because they want you to find a local lender that will evaluate and approve the deal in house. Most banks, like Chase or Bank of America, have a specific mold you must fit into, and if you don't, you have 0% chance to even be considered for approval. At a small bank, you get to plead you case a bit to the loan officer. I'm not saying that you'll get approval, but a small chance is better than none. 

Other issues I see is that it sounds like you're in the process of building the building, therefore, there is no asset to lend against, other than the land. I believe you need a construction type loan for this activity, but this is beyond my experience and I can not offer any constructive advice here.

The credit card game is OK, as you already mentioned, its impacting your credit score negatively, but I think the larger problem is that it infers that you don't have assets, otherwise you could utilize them instead. If you do have assets, I would look into using them as collateral for the loan you need. It may be an easier way to go, with a small bank or a private lender. You could also try hard money, but it is very expensive.

-Christopher

You are correct and I apologize, but you still can't apply this ruling outside of TX. It also apparently hinges on the idea that you don't have a buyer, which means you would need to have the capability of closing yourself.

-Christopher

Also, in case you missed the other thread, here is the link that contains an interview with the Ohio Division of Real Estate. Please take a minute to watch the videos, I think you'll info them useful. I know they aren't for SC, but it helps illustrate what is and is not acceptable in a state that is currently cracking down.

http://watsoninvested.com/wholesaling/

-Christopher

Agreed - but that isn't what is happening.

-Christopher

I wasn't giving you an opinion or advice, I was stating a fact and providing the link to the appeal of the court case in question that your 'guru' suggests is proof of wholesaling being legal. I was, however, trying to provide the evidence softly, so you could look it up yourself, verify the facts, and acknowledge that the link in your original post should be taken with a grain of salt. I bet you think Bernie Madoff was a great investment adviser too - he had great credentials, a cool website, and a great track record. 

My credentials are irrelevant. Any reasonably intelligent person with average reading comprehension can read the article for themselves. The article details the case being overturned and the Defendant had to shell out ton of money. If I have somehow misread the article, please let me know and I'll be happy to apologize. You can't, however, justify a legal position with a court ruling which was not upheld. You also can't take a ruling from one state court, even if it is an outcome you desire, and directly apply it to another state. 

Unfortunately, I think you misunderstood the 'common mantra'. Nowhere does it say to seek out a real estate guru who is peddling his own wares. Anyone who is selling you something is going to be interested in promoting what they are selling, regardless of how good, bad, or indifferent it is. The state in question (OH) has outright said that wholesaling is illegal. Please see the link in the other two topics on this same subject.

Finally, I have no agenda, other than trying to educate new investors. Real Estate Investment has been exceptionally good to me and allowed me to retire at 35. I'm trying to provide advice based on what I've learned over the last 14 years so others can benefit and improve their lives. My personal position is that wholesaling can be legal, however, most newbies are following ridiculous strategies, advice, and sometimes outright ignoring state laws. At some point in the future, this is going to end terribly for them. 

-Christopher 

Odd, when I do a search for this case, I come up with this article...

https://casetext.com/case/xarin-real-estate-v-gamb...

Unless I'm reading this incorrectly, in Appeals Court, Xarin Real Estate lost the case and was required to pay out $257,000.00. Additionally, using a case in Texas by a lawyer in Colorado in an attempt to justify wholesaling in Ohio is not a good legal opinion. Additionally, when I do a search for this attorney, he apparently fancies himself a real estate guru.

I really wish people would quit posting stuff like this - it is really misleading and clearly no research is done what so ever on the original article prior to posting.

-Christopher

Nothing wrong with your strategy, but you need to stay on top of the balances to ensure you don't pay interest. Some cards start charging you interest, if you're late with a payment, even by a day. 

I do a variation of this - I pay everything (personal and business) with my cash rewards credit cards and pay them off at the end of the month. I pay no interest and get around $300 a month back in cash. 

-Christopher

A signed purchase agreement does convey equitable interest, if there are no contingencies on it - but that isn't what wholesalers are doing. They're using the contingencies to create an option to buy the property, without independent consideration (i.e. paying for the option) and often without the means to even close on the contract. If there are contingencies, equitable interest is conveyed when those contingencies are cleared and both parties are now subject to specific performance. The contract isn't enforceable, unless the contingencies are cleared and/or abandoned.

Speak to your real estate lawyer or call the real estate board. You can search for the case law yourself to see if an option without consideration conveys equitable interest or not. I believe there have even been causes in CA where an option (with consideration) was still deemed insufficient to convey equitable interest. 

-Christopher

Driving for dollars is probably the most effective and lowest cost of the options above. I think it gives you the greatest chance to find a property which is not on anyone's radar and the highest probability of getting a great deal. The downside is that it is also the most time consuming of the options. 

-Christopher