All Forum Posts by: Chris Williams
Chris Williams has started 9 posts and replied 97 times.
Quote from @Johnna Lodge:
I am a real estate investor and Realtor in GA.
My wholesale contracts state I plan to make a profit. Noone works for free for a living.
I also state I am a realtor.
I have helped so many people where a realtor would not or could not help.
I have had seller's who state they do not want to work with a realtor.
I usually approach the seller by giving them options to list, what needs to be done to get their best return versus selling wholesale.
I've had people tell me they don't wish to do what it takes to list.
Sometimes I just buy the property where a Realtor would not. I do not wholesale the property.
I have had some issues with other wholesalers mainly due to unethical sellers.
An unethical seller is one who goes under contract with another wholesaler while already under contract. This scenario gets to be more of an issue when you have an unethical wholesaler on the other end.
In every industry there are bad seeds. It can't be helped because you have ethical and non ethical people in every field.
What I have found lately is inexperienced wholesalers lying to Realtors as if they are buyers. This provides ridicously low offers with crazy terms such as earnest money due after ridiculously long term due dilligence ends. This can lead to a bad taste in Realtors and Seller's mouth.
Just be upfront.
In my humble opinion there is a need for wholesalers and Realtors. Be ethical and upfront with everyone you engage with.
As someone who will invest in GA in the future, I appreciate your opinion. I think the wholesaling game is about to get a lot more fun. I think that the government and real estate decision makers will force wholesalers to be transparent business owners as yourself. Transparency is a cleaner way to do business.
Quote from @Jay Hinrichs:
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There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago.
He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners
You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers.
I see one person made an itemized list of arguments and misty encouraging comments on that thread. The only thing that catches my eye on that list is the earnest money. He says he provides a proof of funds, so if there were regulations requiring an earnest money deposit, he should have no problem putting it down. Obviously that’s not the law now so it’s not required. But I don’t see why if everything he said is true, that he has the intent and ability to close, it would be a problem… it’s a nice protection for these distressed sellers. If they get burned they have a few bucks to keep rolling to find an actual buyer. If the deal goes through nothing lost for anyone. It would keep a lot of the swindlers out. It would force the contract flippers to properly vet the deals. Not seeing an issue. And if the law requires obvious disclosure it would have zero affect on his model because he said he does so anyway. The point is that in my (and obviously a ton of other peoples) experience, most are not operating this way. And we would like those people weeded out.
Note that he advises against putting large EMD down. He says he usually gets away with $100, with $500 to $1000 being a max he would deposit if it was an extra ordinary deal. When asked what he does when seller asks for greater EMD, he responds that he simply walks out and looks for another seller. The last thing you want to do as a wholesaler is to lock up your money.
POF is a different story. One can use it to show seller that I have means to close on deal (even if I ultimately end up reassigning a contract). You can use it to show that the transaction can be closed if seller accepts your offer and everything smoothly falls into the place. You don't part with any money when you produce POF. I think what Chris emphasizes is that he never ends up closing on the wholesale property, because he almost always finds buyers for them (simply because they are true wholesale deals). But in the event if for whatever reason such buyer can not be located, then he will be in a good place taking control over the property that is known to have higher value than what he pays for it. So, it ends up being a win-win situation for him.
I believe, as I stated it before, that if you select the property and negotiate its price as if you were the investor to part with your hard earned money to own it, then your deals should be good enough to sell themselves. Provided you do understand the market, the value of the property and the potential to profit from it.
I don't like dealing with bad people. But humans are humans, human nature is what it is. There are a lot of stupid people out there. Some of them are nuts and evil. I never knew how bad humans can get over a buck until I ran a wholesale operation of my own. So, we may never be able to weed them all out from any of the industries where humans participate. What we can do is be alert and understand that doing business is like going on hunt in a jungle. You wouldn't sleep in the middle of savannah, exposed to all the animals and harsh conditions with assumptions that lions, wolves and coyotes are your friends. You would probably put your protective gear on, be on high alert and ready to take action and protect yourself as needed.
Aside from that, the state should step in when something outrageous and obviously criminal takes place. Putting a gun on the head of 86 years old senile man to sign the sales agreement shall never be tolerated in a civilized society. And other things that are done with clear intent to harm shall be prosecuted under existing laws. Not enforcing laws is not an excuse to pass draconian laws. Enforcing criminal laws on the books is what the gov is for. And it should leave the business alone, as long as no criminal law is violated.
No, I don't. Somebody has to be out there with fiduciary duty to sellers and buyers. Unlike a wholesaler who markets B2B, finds distressed (uninhabitable/dilapidated) property and sells it AS IS to an investor to profit.
Then let that seller get a REA to list his property in MLS and get most of it from end buyers. Why seller doesn't do it? Hint: perhaps he tried and no REA wanted to touch his dilapidated junk. Or, he wants quick sale, can't afford to wait for underwriters to find zillions of reasons to deny the conventional loan (which they most likely will, because the house is in need of major repair. And it can't be staged/shown to public with all the trash hoarded all over the place). But, by all means, if REA is needed who is stopping the seller from getting one? Why he even considers selling his property at 50% off?
once again Eric you simply do not know how it really works in the real world.. Many agents list fixers as is Cash only no inspections.. what your describing is a retail transaction with a nice home to an owner occ.. fixer houses go to investors. There is NOTHING that a wholesaler can do that is better or faster than an agent who works with fixer as is houses.. I have bought hundreds of them through agents. Some of the very best deals are bank owned OREO and ALL of those are listed with agents who specialize in those types of properties.
Quote from @Nate Marshall:
Quote from @Will Gaston:
@Alan Asriants there is a ton of nuance to these situations, but I am personally done with wholesalers who require me to tell an owner that I am their "business partner."
Transparency is best for all those acting in good faith.
The wholesaling gurus are amongst the worst. EMD funding gurus are catching up. Hamas gurus are like in 3rd now.
Yep. Real estate costs money. I think a lot of people want to run a business without any cash and are suprised that they have to have some capital to run a business over the long haul. It is not as easy as buy my course = be a millionaire lol.
Quote from @Russell Brazil:
Anyone with this amount of push back against such simple regulation as the requirement to be licensed, and thus the ability of the state to provide easy redress shady operators, makes me think that person is a shady operator. Anyone who operates ethically has nothing to fear from the requirements to be licensed. Only those with something to hide have something to fear.
This is what I been saying for a while now.
Quote from @Alan Asriants:
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Quote from @Jay Hinrichs:
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Quote from @Doug Smith:
Good Post, @Alan Asriants. From a lender's perspective, we're also seeing a lot of greed with some wholesalers raising their spread to the point that the math doesn't work for the end buyer. For instance, we had an application today where the wholesaler got a home under contract for $200k and then put a $50K mark-up on it to sell it to the "C" buyer for $250K. The math didn't work at $250K, but it works at $222K. They are sticking to their full $50K. We as a lender are passing on the deal. If you're a wholesaler, one much understand that a rising tide raises all ships. If you're end buyer can't get the numbers to work, you'll likely have no deal anyway. We used to do a ton of wholesale deals, but the spreads are getting out of hand.
Doug the big issue to me is as a cash buyer I do not get title insurance for the amount of the assignment fee.. I insist on it some title companies will allow it others wont.. its a big issue and I am sure many buyers out there who pay cash have no clue when they pay 250k for a property and the assingment fee is 50k they are only getting 200k in title insurance.. So if title is buggered and one has to make a claim and I seem to have to make about 1 a year with these deals coming through wholesalers if you dont have title insurance that includes the assignment fee you will lose that money.
Jay, why are you buying anything from wholesalers? Why don't you go out and find the sellers who own property directly, so you can buy from individual homeowners and cut the middleman out?
I get it. But if I were you and had such a negative perception of wholesalers, or any specific wholesale deal where I can't get a title fully insured, I would simply forego the assets offered by wholesaler/s. Every day I go buy things for my household I decide whether the price I pay for an item is worth it or not. If it's not, or if purchase is too risky and costly, I simply don't buy it.
As to assignment fee, the average is said to be $10,000, with actual fee ranging from $2,000 to $50,000 or more. It all depends on numbers. Let's assume I , as a wholesaler, after netting $2000 per deal x 20 deals I closed in an entire year, stumbled upon certain property in town A. I run comps with my agent and they come at $450,000. I have full report drawn from MLS. That's my ARV. I deduct 30% and arrive at 315K. I hire a contractor to do accurate estimate of repairs and they quote $45,000. That brings the total down to $270,000. Suppose I want to make $10,000 , so I am ready to write a contract for $260,000. That's my MAO. The seller is motivated and says they want to get out of that property ASAP and will give it to anyone who pays them $220,000. $270,000 is a fair price for that property for an investor. I run my numbers, I know the market, I know the ARV. If I send this property to my buyers I will have three people next day wanting to pay cash to buy it at $270,000. Suppose you, as an investor, also find out (through my RE agent) about that property and want to buy it. Do you think I should assign it to you for less than $270,000, so you can get full title insurance on it, while three other buyers are willing to buy it for 270K with no questions asked (and aware of the issue with title insurance)? How much should I assign it to you for? $230K? And forego other investors/buyers? If yes, please tell me why should I consider it a fair deal and give that contract to you, knowing that this house has $450K ARV after $45K spent on rehab/renovation? What I think is fair is for you to do what I did, to find that exact house or similar property on your own, close the deal at $220K and not deal with me at all. But if you go through me, then I am entitled to my fair share. You didn't pay me to work the entire year, driving one town after another, putting up signs, making cold calls, networking, paying for local ads to make $2000 on each deal I netted prior to this $50K gem. Why should I give it to you for less than it's worth in a wholesale market?
Correct if the title company you were using would not give me insurance sufficient to cover your fee I would not buy it or fund it for one of my JV Partners.. Risk is not worth it.. We have no shortage of deals so this would just be another one in our pipeline nothing special.. And if your other TRUE cash buyers were not smart enough to know about title insurance then thats one them. I suspect a lot of your buyers to most of your buyers are getting HML Loans in that case title insurance is for the amount of the loan and if the loan included our fee then they are insured.. I am sure these are issues your probably just not experienced enough to know of.
The reality is the writing is on the wall states are after NON licensed wholesaling assigning just is what it is.. the fact that you would make 50k on a 220k sale when a brokerage fee would be 15k.. thats 35k that is being taken from a seller who probably knows no better or has just been lied to by the wholesaler as to the real value.. and that is what the law makers and regulators are focused on..
The first part of your post makes sense and I find nothing to disagree with. It's a free market, no body can force anybody to buy or sell anything. If the product/contract/service I offer is not suitable to you then I don't want you to be my customer. We both can happily part our ways under free market conditions.
But the second part of your post implies that all sellers are idiots, or that I (or State) is a nanny that must make decisions for mentally deranged sellers , all of whom have an IQ of 10 years old child. I don't believe this to be true. On my part, I would avoid to close any transaction with someone who is handicapped, has IQ of 10 years old child and is unable to read and understand the contract they are signing. After all, if someone was clinically handicapped and not able to understand and consent to terms of the legal agreement, then the agreement itself could be declared null and void in the court of law.
I will be dealing with adults, not handicapped individuals. And it's their responsibility to figure what they want to ask for their property. I don't run charity, I don't run educational non-profit classes. By the way, that's one of the reasons I don't want to touch pre-foreclosures, with accounts delinquent for 60 days. Some wholesalers do, they go and offer to help sellers to stay in their homes, educate them about loss mitigation , ask if seller needs help with it and etc., before seller begs them to just rid them of their house. I will have none of it. It's none of my concern to educate or baby sit another adult in my state. No one did for to me, except for my parents, and I have no intention to parent strangers. But once I have an adult, with full cognitive abilities, who is motivated to sell and get out of that property for MAO or less, rest assured I will make my offer on that property and if they accept it I will write a contract. Let them State AG's come after me in droves, there is no crime in making an offer to someone who owns the property to buy it from them. It's marketing to public that is illegal and I have no intention to sell dilapidated , dirty , stinky and full of trash property to an end buyer in MD or anywhere. I won't sell it to investor either, I will simply secure my interest in the contract. So, which part of it is illegal or wrong? You could say I am taking it from seller if I had a contract for 220K and paid seller 185K. That would be stealing from a seller. But if seller is entitled to get more, then who is forcing them to give their property to me for 220K? Who is stopping them from finding you or other investor on their own and getting full $270K in their pocket? I certainly don't. Regulators and law makers in these blue states couldn't care less about the sellers. If they did they would have better economic policies , create safe neighborhoods and investor/business friendly atmosphere, to make their citizens prosper and able to afford the houses they live in, instead of losing it to banks in foreclosures. No, it's not the sellers they care about. They care about eating all the pie by themselves and sharing it with those who finance their campaigns and free vacations, that's what those law makers really care about. And while at it they will make sure there will be more poverty , more foreclosures and less opportunities for average Joe to make a living here. We all know the drill. I am just glad that we have 50 States and not all of them are blue and purple. So, we can still focus on doing business, even if it means we have to move out of blue and into a red state in the near future.
so Eric you have not actually done any deals it sounds like.. U understand the 70% minus rehab costs those numbers have been going around for a long time.. its pretty tough out there right now but hopefully you can make it work.. although I always wonder why those that want to sell real estate ( that is what your doing at the end of the day bringing a buyer and seller together) why you dont just get in the game with a license and make a career of it.. if your any good at sales and can stick to it can be a very rewarding occupation.. wholesalers they dont last very long unless they are very well capitalized and vertically integrated.
Good question, Jay. For couple of reasons. First, becoming REA requires 60 hours of schooling , and then you are stuck with less than 3% commission per transaction (see below link with average rates of REA's compensation), and tons of regulations on top of it while competing with hundreds of other realtors on MLS. It's just not worth doing it in my opinion. It works well for those who have been doing it for decades, but it may take at least a decade to get anywhere as REA.
Becoming a broker takes 3 years in MD after becoming REA. You can't apply and become a broker without those 3 years under your belt. And then you split commissions with agents and have a cap limiting what you can earn on each transaction regardless of the deal you struck. How is this fair to the broker?))
After much research and talking to people who did it all (running crews/flipping, owning to rent/passive investment, brokering, selling real estate as agents and etc.). I concluded that wholesaling is best to start with. Gradually, if you are able to make it work, you can explore flipping, owning to rent and other options to build wealth. But none offers a quick turn around and cash flow, with the least amount of headache and financial risks (not to confuse with the least amount of WORK), as wholesaling. It's just a good stepping stone when you enter the world of RE investment.
LINK: https://listwithclever.com/average-real-estate-commission-rate/maryland/
The average total real estate agent commission rate in Maryland is 5.34% of the final sale price. Based on the latest median home sale price in Maryland ($418,534), that translates to a total cost of roughly $22,350.
Home sellers typically cover the total commission fee from their sale proceeds, which is split between the listing and buyer’s agents who handle the sale. In Maryland, the average listing agent fee is 2.76%, while the average buyer’s agent fee is 2.58%.
Real estate agent commissions make up a significant portion of the closing costs for Maryland home sellers. But you don't have to pay the full 5.34% to a traditional agent. If you're selling a home in Maryland, you can use a discount broker to save on realtor fees. In fact, depending on your situation and the agents you work with, you could save 33% on realtor fees, or about $7,366 on average.
this is why wholesale guru's can sell 30k packages as people drink the cool aid basically verbatim of what you just said.. Any way like I said good luck..
Thank you. But from what I understand in wholesaling it's not so much luck but consistent work, good discipline, persistence and ability to analyze deal that deliver results. Discipline and consistent work would probably top the list, as analyzing the deal doesn't take much brain power and effort. Negotiating comes naturally once you properly analyze the deal.
The gurus are another subject. May be they are the ones who should be outlawed. There is absolutely nothing one can learn in this business worth paying 30K. The rules of the game are simple, can be read and understood in less than a day. It's amount of WORK and CONCENTRATION that will make a difference between make or break, and no GURU can make you stick to your regimen and do something persistently and systematically if you can't make yourself do it.
The issue is that many wholesalers falsely advertise themselves, lie, or keep seller in the dark to make the deal work. They lose deals unfortunately when they are transparent
A lot of people are stupid. Not just house owners/sellers, but people in general. 15 years ago I was in reverse logistics/liquidation business. I was able to consistently buy and then liquidate certain number of pallets/goods through the channel I have established. I would go to warehouses, negotiate/make an offer on a truckload of goods and then purchase one pallet at the time to help miserable seller to get rid of it. I never spent fortune to fill my warehouse with truckloads of goods, but I was buying them at the rate I could liquidate them and as long as I could liquidate them. Obviously, I profited handsomely while doing it. And what I recall is that out of 10-15 warehouses I dealt with ONLY TWO were owned by decent men who knew how to do business. One was a Chinese owned in NYC and another was owned by Hasidic Jew in New Jersey. These two were grateful to me that I was helping them clean their warehouse and get rid of their shittiest products that no one was willing to buy from them. All the rest grew resentful, angry and jealous when they saw how quickly I was moving their pallets. They were angry and resentful that I was making money on the trash that was sitting in their warehouses forever and that they couldn't sell to anyone on Earth. They would start playing games, sometimes pretending that they were not available or able to deliver goods. At others they would ghost me. Or, worst of all, try to go behind my back and find the distributor/seller I was dealing with, to cut me out of the deal. If I asked them why were they being so idiotic (of course in milder, non insulting terms), their answer would be "it's a dog eat dog town". Idiots! One of them lost the business and money couple of years later. I don't know what happened to others. But the point is, I am very well familiar with this idiotic type of product owner who is NEVER able to sell his goods, but gets angry and resentful at you if you help him to, because he thinks he is entitled to get what you get just because it's his goods that you found him a buyer for. I hope to spot sellers like that during my fist contact and send them to kick rocks and forever live in the $*it they are, with no help coming from me to get them rid of their property.
Nothing wrong with buying the property and closing on it then selling it for more. That is true wholesaling.
But flipping contracts and tying people up into deals they are blind about is a concern
I agree that people often times dont value your connections and are greedy to find out you can sell something for more. Best to just not work with those kinds of people. Your connections and time are certainly worth $$$
Quote from @Nate Marshall:
Colorado will be next. 46-19 democrats to republicans. They just passed some extreme anti landlord laws. They are gearing up for some extreme anti wholesaling laws if they still have a 2-1 majority in 2025.
I am not sure the Democrats are the reason wholesaling is getting banned lol. It is getting banned because people have abused it.
Quote from @Will Gaston:
@Alan Asriants there is a ton of nuance to these situations, but I am personally done with wholesalers who require me to tell an owner that I am their "business partner."
Transparency is best for all those acting in good faith.
I am switching to a wholetailing type model. It is cleaner and makes more profits. I have been burned too many times on assignments and trying to beg a cash buyer to pay a number I want. I know that MLS will always give more than a cash buyer.
Post: Private Money Lending Gone Bad
- Wholesaler
- Posts 99
- Votes 39
Quote from @Erik Estrada:
Too many.
I have had to tell borrowers "are you sure you want to move forward with this? You are way too over leveraged." Many times and they still insist. Just because you get a loan approval does not always mean you should move forward with it. In a market like this where properties are sitting a bit longer, buyer demand is kind of stagnant, many appraisals have been coming in lower than anticipated. This in turn will kill your exit strategy if you are not doing your due diligence and playing conservative. Some Investors also underestimate the timeframes of the rehab, especially here in CA. It is very time consuming to get permit approvals and you may be in a position where you need to extend, pay fees, etc.. when your loan is past due.
Yea I have been talking to some mentors and they have stressed the importance of having instant equity and multiple exit strategies in a market like this. I actually got caught up in the creative finance bubble of trying to lock up properties way over their value just because it had creative terms not realizing that if you were to buy a property at 120% of its value you will never be able to refi or sell without paying out of pocket. Instant equity just seems to save everyone in the deal. The investor if they slip and the lender if they need to take the house back.
Post: 5 Tips To Create A Real Wholesaling Business And Not a Chop Shop
- Wholesaler
- Posts 99
- Votes 39
Quote from @Account Closed:
Quote from @Chris Williams:
Quote from @Account Closed:
Not too hard for someone who reads and understand plain English, which is what it takes to understand the law. Or, if one can't read and comprehend it, pay $300 to an attorney and let them explain it to you. As long as wholesaling is legal it shouldn't be hard to do it while complying with the law. If they ban it, then court challenges are likely and how it will settle is to be seen.
Just get your license bro it is a few hundred dollars. It won't kill you. Sadly real estate costs money. Just follow the rules. You a sole investor are not going to overule a ruling made by legislators.
Well while you are fighting the fed I am going to keep connecting. Have a good day.
Post: Wholesaler Licensing Requirements ? Good or bad
- Wholesaler
- Posts 99
- Votes 39
Quote from @Crystal Smith:
Quote from @Matthew Morrow:
There’s new legislation being proposed in Pennsylvania that may require wholesalers to obtain a real estate license. I can see the arguments from both sides and am curious to hear how others might adapt their business practices if such a law is enacted in your state.
Interestingly, South Carolina just implemented a similar requirement last week, and it seems like more states may follow suit soon.
What are your thoughts! https://www.parealtors.org/blog/realtors-advocate-at-capitol...
For investors that treat Real Estate like a business, and a part or all of their business is wholesaling, then a change in the laws is a good thing for a good business person. The good business person will adapt and the bad ones will drop out of the business.
Exactly. I am excited with the new regulations. I know a few grimmy wholesalers in my market and knowing they are not willing to get license makes the pillow softer at night. I also know they won't take the property down and list it on the MLS since they are trying to run business without using any money.