All Forum Posts by: David Dey

@Cameron Skinner I hate to be the nay sayer on this one seeing as it is an attorney on the other side.  And of course you know when an attorney is lying right?  When his lips are moving!!!  @Matthew Kreitzer don't sue me!!!  😜

Actually, at least in FL, compensation is not the determining factor.  It is the unlicensed giving of advice or practicing of law.  

Awhile ago, I prepared a deed for my own land trust.  (Of course I am not my trustee and myself as beneficiary was not public record) i had hired an Atty to be the trustee, but through some misunderstanding within her office she was never informed and the trust was never ratified.  Long story short, I had prepared the deed, and the Atty sent me before the bar for practicing law without a license.  My regular Atty informed me that it wasn't about financial gain but the actual practice of unlicensed law for someone else.  I had to show them that I was the actual beneficiary and was doing he deed for myself.  

But I'm not bitter!!!

By the way, what's the difference between a porcupine and a Mercedes with 6 attorneys inside?

With a porcupine, the pricks are on the outside!!

(My atty loves when I tell him these jokes) 🙉🙈🙊

what @Bill Gulley is trying to say in his oh so gentle fashion, (I mean seriously Bill, tell them how you really feel don't tip toe around the situation!! 😜)

Education is key!!  I believe that real estate is the last great industry that needs to go back to the "master/apprentice" model.  And yeah Bill, before you say it, I agree, not a guru.  The original concept of wholesaling was based on investors that were buying for themselves and had so many good deals that they decided to share one of their contracts to their associate for a small profit.  But they had the capacity and the willingness to buy it themselves.

The dangerous thought process is that you can jump into this business as a get rich quick scheme. That's when you get so many "newbies" scouring the MLS for deals, putting contracts on properties at prices that no "real" investor would buy them at, and in the end muddle up the market and expose themselves to legal issues.

If you want to get into this business, more power to you.  Study everything you can from #1 the rules of the business (yes Bill) to the creative side of deal making and investing.  Learn from the real gurus of real estate investing, (think Jack Miller, Pete Fortunado, these guys have forgotten more about investing than I've ever learned)  

Get yourself associated with established investors in your area (not wholesalers, investors) learn from them, find what they are looking for and with their permission start bird dogging for them.  This way you'll have an actual exit when you put a deal together.  Have the investor help you put the deal together.  

Basically, pay your dues!!  I know this doesn't sound all that sexy, but it will pay you long term dividends and keep you on the straight and narrow.

Ok Bill, I'm ready for my tongue lashing.  Let me have it!!

P.S.  I've got a great contract on a bridge in Brooklyn that I'm assigning.  It's a really good deal, and a great opportunity to own some waterfront property.  First come first serve!!

@Anita Fofie I can't guarantee you that these tips will get your property sold, but at least it will give you more options.

1) I know you have negotiated the price of the property down, but have you negotiated any terms?

As you said, you can't practically give it away.  Well neither can your seller right now.  So you might as well team up.  Let him know you are doing everything you can to move the property, and what might be the next step is for him to owner finance the place.  Work the best terms you can, like no payments or interest till the place is fixed so you buyer doesn't get stuck with payments till finished.  It won't be any skin off his nose at the moment, cause he isn't getting paid right now anyway.  Who knows, depending on his/her financial standings, he might even be able to finance some repairs as well?  You might have to wait on your fee for a moment but it might be worth it to be able to "give it away."

2)  have you asked what happened to the insurance proceeds?  He probably has them and doesn't want to use them, but it may come down to needing to do some at least, "whitewashing" of the property, or maybe you have to spring for a little cleanup if you believe that much in the property.  

I know the place is beat up from the fire.  I know that investors and lenders are supposed to be a unique breed that can look beyond the muck and mire and see the gem that a deal is supposed to be, but the truth is that sometimes we are as "blinded" by the mess 💩 and miss the gem.  Sometimes a good cleanup, a pressure wash, or even a coat of paint could be the difference between a sale or not.  (Gasp, sometimes even we wholesalers have to do something to earn our keep. 😜)

3)  Are there any city programs out there available for assisting the buyer in fixing up the place.  Your knowledge in helping them solve this problem could be crucial in getting the place sold.  (The more value you add to the deal, the more deal it is)

4) Spread your net wider.  This is a multi unit property, and this is Chicago.  You may have better luck on a national scale.  Have you considered listing it on Loopnet.com?

5)  On the other hand, my mentor always told me, "you can market all over the world but your buyer is just a stone's throw away."  Are there any other multi-families in the area?  Were any of them purchased recently?  You may have your buyer right there?  Check with your local permitting department.  They can tell you who has done major renovations in the area recently.  (It's public record)  your buyer may not be on your mailing list, he may be next door.

Well like I said, no guarantees that these tips will work but at least maybe they wil give you some additional ideas.

 Lol, uh-oh now you are qualifying your son may need some training.  I thought that he was real estate progedy.  

Again, 1) you can't buy my experience.  2) you definitely could not put it together in 90 days.  3) I make a heck of a lot more then 40k and even saved a lil bit too.  

That being said, I do hope you are taking this in the fun that I am intending it to be, with the exception that I do stand behind my stance that sweat equity and problem solving is currency. The fact is, because sweat equity is currency and problem solving is currency, I now rarely ever have any use for HML.

But I betcha, if I brought you one of my deals, I would be one of the 5-10 that you liked. 💰💰😎

I think maybe even your 12 year old would agree that my deals were pretty good.

David

First, I want to congratulate you on having such a good name. (I like you already!!) 😀

Again, thank you for your service, to both you and your girlfriend.

Now regarding both of your thoughts,

As a full time wholesaler, let me debunk a myth.  In your pm to me, you stated that your GF wants to try wholesaling as a way to generate cashflow.  You will not be adding to your cashflow by wholesaling. The very definition of cashflow, revolves around the concept of reoccurring income. Wholesaling is anything but that. As is fix and flip.

If you move into the arena of wholesaling, you will be basically taking on a job.

On the plus side, You will be self employed and you will have the ability to make very good money, (this month's profits are set to be around 50k. Next month's are already set to be between 75-100k or more)

However, you need to realize 2 things. 1) when that money is gone, it's gone. Your results hinge entirely on your efforts. 2) the kind of income I just mentioned comes with a LOT of work. And it is a direct result of over 18 years of knowledge. Here is the dirty little secret that gurus never mention, it's as simple as they tell you, it's definitely not as easy.

It takes work!! And those deals that they tell you are out there, well they are out there but it takes more than just peeking on the MLS to find them or asking your realtor to bring you leads. You will be working a job and you will be paying your dues.

I'm getting ready to write a post or article on this site about how real estate and especially wholesaling needs to be a master, apprentice concept.

To truly be successful at this, you need a mentor, and not a 10k guru. 1) most of them don't have the experience that the investor on the ground does. I know some of the guru guys and some of them have never actually done a deal. (Not saying anything to disparage anyone on this site, I do know some of the gurus especially some of the newer ones who have NEVER actually done a deal but are regurgitating someone else's info in a different package)

2) And the trainers in those programs, most of them are paid by the hr "personal coaches" reading from a manual that have never done it themselves. (You can ask them if they've done it and they will lie to you and say yes, but try asking them for a deal that they did recently and see what they say, or better yet, ask them if you can look it up in public records and watch them squirm)

You need a mentor that is a real investor on the ground, preferably in your area but many are good right on this site. (The ones here will be mainly for information and accountability, whereas the one in your area can walk you through deals on an on going basis)

Back to your thought, buying a duplex to 4-plex would be a great way to start learning true cashflow. Yes, the rental biz is the only way I know of that allows you to build true residual income. It is actually the true concept of "investing."

I know it's not as sexy as 50-100k a month of cash but it is the best way I know of how to generate true wealth.

But here's the best part, you could do both!! Buy the 2-4 unit. Generate the cashflow, then take 1-2 hours a day or every other day and work your wholesaling biz.

Don't quit your day jobs!! (Or at least make sure you keep a stream of income that supports you going until you have at least doubled that income consistently and preferably with cashflow not one time deals.)

The biggest killer of your business is desperation!! If you NEED a deal, you get sloppy and mistakes happen. That's why I say keep the job. Let this business build your future more than your present.

Educate yourself on this site, learn the fundamentals of real estate of investing and sure wholesaling. Spend your money sparingly on this business. (In other words learn to think creatively, learn to become a professional problem solver, not just throwing money at a situation to fix it) use your mind more than your wallet.

Get a mentor!! But don't spend your money, spend your mind, your sweat equity, your legwork, etc. (use the same mentality from the paragraph above, use your mind more than your wallet)

I hope this helps. 

 Ken

I too am part of the infamous 1% as I started in 97.  And while I loved your post, I couldn't resist taking you up on your challenge.  

I'll put my money up against yours if your 12 year old can beat my deals!! 

But if he can't, I want my 100% funding!!  😜

Seriously though, I do agree with 90% I disagree slightly that if you don't put cash into a deal, you are not investing.  

Sweat equity is currency!!  

Problem solving is currency!!

If you look up some of my posts that show the problems I solved in exchange for equity, I think you'll be hard pressed to say I have no "skin in the game."

I do agree, that if you aren't doing or contributing anything to the deal then you have nothing to lose and that's not investing.

I just can't throw the baby out with the bath water.

P.S.  Should you happen to want to take me up on that challenge, I happen to have a track record of winning those types of bets.

I bought a 22 unit apt complex (5x 4plex 1x 2 duplex all block 2/1 units) for 150k.  I offered to resell it for 350k.  A big buyer brought me to his office where he surrounded me with his banker, CPA and his Atty.  He then went on to barrage me all the things wrong with the place, his CPA went so far as to tell me that if actually could sell the place for 350k that he would take all his money from all his other investments and jump in bed with me.

I politely declined his offer and called him back the following week after selling the place for 365k and told him to call his CPA to provide me his money in 50's and 100's but to stay out of my bed as I wasn't that type of guy.  (I at least need to be wined and dined first!!)

You have been warned!! 😀😜

 "Skin in the game," refers to your "pound of flesh" that you're willing to put into the deal to make sure that it succeeds.

What the lenders are looking for is, what are you willing to put into the deal to make sure that you don't just walk away when the going gets tough.

Usually this refers to a down payment of at least 10-40%.  This could also be collateral in another property that you own free and clear or at least with a truck load of equity.

When I am asked that question by a lender, I ask them if they will allow there to be a second mtg from the seller for 35-50% of the price in lieu of a down payment.  Many times the lender will agree under the thought that if the loan goes bad, the seller will step in to protect his interest.  So though it may not have come from you, there is skin in the game.

In the end, the lender's thought process is simply this, I don't want to be the only one holding the bag if something goes wrong.  That's why he asks for "skin in the game."

Hope this helps

 The only reason, the title company is saying that the bank doesn't allow it is because you are dealing with the banks title company.  You can require that you use your title company for your half of the closing and than do the double close from your side.

My only thought was since you weren't making anything, just close it with your friends money then special warranty deed it to your friend.  (Don't quit claim it because if you do, you'll void the title insurance)

 Why don't you go ahead and buy the property from the bank using your friends money than just deed the property to your friend?