All Forum Posts by: Charles Borrelli

Us folks right here on bigger pockets are on the front lines. Maybe we need to see whats going on and do something about it

You have to ask yourself.. Would a licensed broker ever do this? And if they did could they lose their license 

Most investors look at all the HUD, MLS and Hubzu properties every day and if they want it they buy it. As a wholesaler I cant see where you can do much there. Find off market deals.. That's what investors are looking for. There is real equity potential there. And get a real estate license so you don't end up in jail

The Poster is correct. Not all wholesalers are unethical but most of them are. Wholesaling without a real estate license is a crime that is skirted around with a few minor points of law. Mostly about (Equitable interest) but the bulk of the time the seller is deceived and the wholesaler has no real interest.  In cases where the state has wanted to prosecute the wholesalers nearly always end up losing. I know this will insult a few honest wholesalers and it will insult a lot more dishonest ones but the truth is we don't need them and for the most part the industry would be better off without them. I buy from wholesalers because I have to. I like a few of them.  Some I tolerate. Most of them I cant abide. I have seen them lie cheat and steal (But mostly Lie) . Real estate is about honest practice and disclosure. We need state laws that more closely define what  requires a real estate license. That's not to say licensed persons cant be dishonest but at least they are bonded and regulated. 

Example... True Story.. I live in Palm Bay... 2 days ago I get a text from a wholesaler about a "Smoking Flip Deal" in my town. The wholesaler lives 2 hours away and doesn't know diddly about my farm area. I ask if he has a real estate license, He answers "No I don't have a real estate license" He wants 175k for a nice 1700sf house in a gated community. So I ask how he got the bank down on the price. He says (I really go hard on them) I know hes lying because its a HUD property and I have been in it several times already ( I would have purchased the house but its a terrible deal). 2 days later the house is back on HUD site. Which means..... That's right he never had the house under contract because he didn't pay his earnest money deposit. This is brokering without a license, its a felony. Its fraud and it involves federal property. As an active investor I see this all the time. Its very frustrating

NEW Wholesalers..... Want insight into your customers and what we know? I know this seems harsh but its just strait honest talk. Its not meant to offend. 

I rehab I take Title and add equity though repairs. Some I hold some I sell. If your numbers are right I will buy if not I wont. My wife is my Realtor.

I know that every start up with no money wants to be a wholesaler because a guru told them they could and only a tiny percentage will make it. 

I know when you just spent your last 3 grand on the latest guru boot camp scam. 

I know when you have over estimated ARV and underestimated repairs which is most of the time.

I  know that a filled in garage is not really square footage. 

I know that most of the time a roof is not as good as you think

I know you don't have any deals when you send us MLS and HUD Listings. (We have seen the MLS and HUD listings in our local area before you did and If we wanted them we would have bought them then) BTW we just wait for you to lose your earnest money then buy that HUD with a backup bid....

 I know when you don't have a deal under contract.

I know It costs thousands to generate the leads to find a deal. Gone are the days of sending out a few hundred letters and getting a handful of deals. If that worked I would pay my daughter to do it. This is a great business but no quick fix for a broke life. If you don't have the discipline to manage your bills you wont be able to run a business so fix that first. 

 I am on about every wholesalers list in FL. I look at deals every day. Out of the legions of wholesalers I get offers from I buy from 3. And 90% of there deals are crap. And I still find most of my own deals. Its pretty tough for a guy or gal 3 counties away to know my local market. A few can do it but most cant. 

 Honestly I never had a Formal Mentor and personally I think most of them are scam artists, I never followed a formal system... Also mostly scams...Having a few good friends in the business is instrumental. This business is not as complex as it seems. If the numbers are right the deal will work. Its good to be informed and you should absolutely read and learn. And Study your local market. Know those comps like the back of your hand. But if you wait too long you will just plain run out of steam. When I started I went to local  RIA meetings. Many of the new guys I met there are still new guys waiting  years and many deals later. Nothing will give you knowledge and confidence like doing a deal and making money.

That sure is correct Alex, I have seen folks sit in REA meetings year after year going to seminars, taking guru courses, while I purchased and sold property after property. You have to do your research but the sooner you jump in the pool the sooner you get over the anxiety. Profits make short work of anxiety! I worked as a nurse 24 years. My second year flipping houses I made 8 times what made as a nurse. You can do it...

As for buy and flip or Fix and flip as Adam Adams touched on there really are very few issues. Don't buy government houses as owner occupant and then flip them. Set aside money for taxes, the rates are high when you short term flip. There are banks that won't loan to some of your buyers if you have had a property less then 90 days. This happens with FHA buyers sometimes. The way around this is to use a land trust. Or just wait it out.

That is a grey area in real estate. By law you can't broker a deal between people without a license. So when you put a house under contract you must "intend" to purchase it. A double close removes all doubt and if you use a trust it covers you double. If you sell the contract you could get into some trouble but likely not since nobody has any way to track it. On the other hand if "John" a Broker or agent goes to "Joe" and puts his house under contract $50,000 then flips the contract for $70,000 the next day to "Steve" the fix and flip guy, and pockets the $20,000 spread. John the broker can get into some major doo doo if the real estate commission catches wind.Because he did not act in "Joe's" best interest since clearly he knew the property was worth a lot more then $50,000. He proved this by flipping it for a higher price the next day. "John the broker" Used his superior knowledge as a professional and took advantage of Joe. And these deals happen all the time. 

Palm Bay has a lot of distressed homes. However most of them are bank owned. Most of the privately owned distressed homes have been approached many times. You can find deals here but it will take diligence. We are always buying properties with rehab potential and do buy from wholesalers as long as they are fair and the numbers are not inflated.

Welcome Genia. We are also investors in lower Brevard. Palm Bay and Melbourne. We do a lot of flips and some buy and holds as well. Good luck  Chuck and Sue Borelli