All Forum Posts by: Christina Carey

@John Horner Yes, that's also true. Jeff Watson is the attorney who also clarified that in a video that I believe is still available on the Division's website. Some of these gurus are still teaching BS, but others, including the client Jeff mentions in the video, have modified their program to cover the issue. Recently Jeff has partnered up with another local "guru" and they're using fear-based sales tactics to scare people into signing up for their program so they can learn how to wholesale the "right way".

Let me expand on what @John Horner just said: looking at ORC 4735, defining a real estate broker, the key words are "for another". I would strongly suggest that any wholesaling you do involves a double close. It's the people who are putting things under contract with the express and obvious intent of assigning the contract who are under serious scrutiny. At the very least, you need to make sure you have funds available to close the deal yourself, even if it's transactional funds (it cannot be your end buyer's funds though).

As far as getting your real estate license goes: if your wife is already licensed, unless you intend to do retail sales, there really is no need to have the additional expense and liability of two licenses. You already have access to the MLS, which is what most wholesalers are after anyway. My husband and I are both full-time investors, but only I have a license. He does plenty of wholesaling, and it is a rare thing for him to assign a contract, but if he does, it's not because he couldn't close the deal himself.

But let's say you do want to also be a traditional agent representing others. It is a fine line to walk with sellers, and it needs to be explicitly clear which hat you're wearing from the outset. If I am dealing with a seller as a potential buyer myself, my first obligation is to disclose that I am a licensee, while making it clear that I am not representing him or offering to list his house for sale. In making an offer, I would also be clear about what I thought he could get on the market if he chose to list it for sale - in other words, full disclosure, always.

Conversely, if you are dealing with a seller in an agent capacity, and you've signed a listing agreement and set a list price at $100K because that's what the market says it's worth. You now have a fiduciary duty to your seller. Then your seller says, well it would be great if I could get $100K, but if someone comes along and offers $80K, I'll take it and run. (Let's assume $80K is a great deal that you could wholesale for the purpose of this discussion.) I personally believe it would be highly unethical to then say, "well Mr. Seller, I can give you $80K right now" without giving the seller a chance on the open market since that was the plan was to start with, and also because the seller was confiding in you as his agent and may not have said that otherwise if he knew you were interested in buying yourself. I think that crosses the line into taking advantage of someone, and I think the Division of Real Estate would agree.

Bottom line is, if you choose to wear both hats, you have to be clear as to your intent in any situation to ensure you cover your hind end, as well as your broker's.

What type of agent are you seeking, beyond (I would assume) investor-friendly?

Ditto for attorneys?

PM me and I can provide at least a couple in both categories.

@Nate Bendall Hit me up privately and we can talk more specifics - my contact info is below.

@Nate Bendall We list a fair amount of short sales, some of which are "flip-worthy", assuming you are referring to retail/owner-occ resale. The only additional item required to buy these is a good dose of patience.

@Francisco Garcia Try Max Arroyo with Berkshire Hathaway. Not sure what type of commercial RE you're looking at, but if Max can't help you, he'll surely know someone who can.

Well ... as a licensee, I cannot comment on the safety or desirability of a given neighborhood. There are websites that allow you to research crime stats though. I'm sure some other local colleagues who do not have a real estate license can add their two cents here. Like @Paul Amegatcher, or my other half, @Darrin Carey.

Since you are local, I would suggest you take a leisurely drive on a couple different days to check out the various neighborhoods (I'd make one of those trips on a Saturday night). Do it during nicer weather where you're more apt to see people out and about. Clues of a less desirable neighborhood are: several houses on the street are obviously vacant and abandoned; people are congregating on front porches everywhere on a weekday afternoon; the majority of cars parked in some obvious level of disrepair. Better neighborhoods will have little to no abandoned properties, cars in better condition, and congregating is more apt to be a weekend barbecue than a group of drug dealers on a street corner or a front porch.

For the record, there are neighborhoods on both sides of I-75 that are equally good, as well as those that are equally bad. The unwarranted stereotype that all of West Dayton is riddled with crime simply is not true. Unfortunately, it's also some of the REIA-type groups and real estate agents with elitist attitudes who share responsibility for perpetuating that falsehood. Dayton neighborhoods vary greatly from street-to-street and even block-to-block all over town.

Now, onto the 2% rule ... you are correct, the suburbs are generally not going to yield 2% unless you get a disgustingly good deal. And everyone is looking for that good deal. Basic laws of economics - supply and demand. If it's in a nice neighborhood with desirable schools, you're competing with owner occupants who will almost always pay more than an investor. In theory, the lesser return in those areas is offset by lower expenses in terms of turnover and maintenance. That's where you have to decide how much drama you want to deal with in exchange for those returns - if your tolerance for drama is higher, then you may fare well in less desirable areas. Or you hire a property manager and let them deal with it regardless. A good one earns every penny they charge and then some.

@Ian J. Cheadle you can get all the details of the networking meetup here: Dayton Real Estate Networking Meetup The next one is this coming Monday evening (always the second Monday of the month).

@Robert Gibson I'm not the aggressive salesperson you're looking for, but I can certainly point you in the right direction. Feel free to give me a shout.

Hi @Megan Crist. Before I got my broker's license, I used my LLC (with S-corp election) to receive commissions as a salesperson. I also used this entity for flips - essentially, if it was a Schedule C activity, it was done inside the entity. Because the entity was already established, I simply rolled that into being a licensed company (with the ODRE) once I got my broker's license.

Without the S-Corp election, there is no tax benefit to the LLC, as the income all flows through to your Schedule C anyway. If you're looking to keep your name out of the public record in terms of property ownership, the LLC will accomplish that, but only if you have someone other than yourself set it up (like an attorney). Otherwise anyone can look up your entity on the Secretary of State's website and see that the LLC is you.

That said, we also use land trusts for property ownership and anonymity in the public record, but the principal is the same - the beneficiary (owner) of the land trust is still a taxpayer.

One other thing to note, and an attorney or an accountant will tell you this as well. Should you acquire rentals at any point, do NOT mix those long-term holds with your earned income activities. Rentals go in a different basket.

Clearly there is a lot more to this than what I've said here, and I am not an attorney, or an accountant, and everyone's situation is different anyway, so you should spend a few bucks and sit down with one before you do anything - preferably one who is also a real estate investor. I can recommend someone in your neck of the woods who is all three of those things, and he is brilliant. PM me and I'll send you his info.