All Forum Posts by: David Neese

This is great!  Thanks for sharing.  There is also need for single office suites right beside contractor incubator(love the name, didn't know what to call this) spaces.  I was looking for similar for a different business recently and while there are several under construction nothing much was available in a reasonably convenient location.  There are a lot of small e-commerce businesses that would use that same space if they had access to a single room office.  

Welcome Jack!  I went to HS and college in Grand Forks.  I hope we see more networking opportunities in this area soon.  I have some ideas I never seem to get around to implementing. 

I live in Omaha but mostly invest and build in the Memphis market and specialize in building new homes to rent for investor/buyers.  The new tax laws make buying new construction as a rental property very favorable. 

Omaha has several advantages:

Lower unemployment

lower vacancy rates

less crime

higher wage rates

Wasn't affected that badly in the recession and was a top 5 city economy all through the recession.

People just seem better in Omaha than anywhere else I have visited or lived. (my feeling)

paper numbers work out better but are harder to achieve

On the downside:

skilled trades will be more expensive than St Louis

harder to make the numbers work on paper

higher property taxes

Make sure you attend the networking meeting Wed night that Colin holds if possible.  You will find real estate investors tend to be very helpful people as you will learn that none of us know everything and regardless of how long you have done this business you are always learning something new.  

Hey Matt, 

This is totally my opinion and I express this often to new wholesalers at meetups in both Omaha and Memphis. 

Wholesaling is legal in NE.  At its most basic level, you are simply assigning a contract to someone else and that doesn't require a real estate license.  However, I believe(not a lawyer), that if your intent is to never close on a home then you probably should have a license.   I do not believe you should put a contract on a house unless you know you can perform on the contract if you don't have a buyer.  This may mean you need a partner, or hard money lender lined up to help you acquire the deal.  This also means the deal must be good enough for a partner or hard money lender to be willing to participate so it acts as a check and balance for your deal.  

Where you can get in trouble with wholesaling is when you don't perform on a contract and someone sues you for non-performance and it comes out you were trying to sell their house to another party and never had any real intent to buy the house. 

With all of this being said, I always try to wholesale any deal I pick up first.  I try to assign it first or simultaneous close.  If I have to close on it I do and then keep trying to sell it while I fix it up.   Once it is all fixed up I either lease it out or sell it retail.  

I believe you should always try to wholesale your deals first for cash flow speed.

If you find a deal that is a real deal you should have zero problems finding a buyer for it.  

I do think if your intent is only to assign contracts and never close on a loan you should probably be licensed.  This will also expand how you are able to work your leads as you will have more opportunities.  

I have had some wholesalers tell me they fully disclose their intent to flip to another buyer and never close to the seller, they are probably safe doing this in that the seller will probably never complain to the real estate commission, but that is openly admitting that they intend to fulfill what the state considers to be the role of an agent.  

I would negotiate the interest rate to the point where you make at least 200 per month which is still a pretty tight margin.  

It is interesting how the 1% rule affects peoples perceptions about a property.  I build for investors in TN and in the area I build our tax rate is only 0.6% which is insanely low.  A couple of miles away in the next county it is 1.5-1.8% and makes a huge difference on appraisals and cash flow.  We build a 1300 foot home that sells for 140k and rents for 1200.  Compared to Omaha the property tax alone saves around 175 per month which when added to the rent almost makes it 1% on new construction.  A lot of the Memphis turnkey home providers sell remodeled homes at that 1% price point.  

Alexis, your property taxes in CA are held artificially low due to CA Proposition 13.   I think a lot of your rates work out to about 0.8% of assessed value annually whereas Omaha area runs 2-3% annually depending on the location.  New homes in SIDs tend to run around 3%.  On the flip side, properties are far cheaper in Omaha.  Omaha rates are not horrible compared to much of the central USA.   NE also has personal income tax but a moderate sales tax. 

You will find Omaha has consistent property value growth regardless of how the rest of the country is doing due to an economy that is somewhat diverse: hi-tech, insurance, railroads, and agribusiness.    Omaha was consistently in the top 5 cities for economic growth during the recession.  

This is a great meeting I always attend when I am in the Memphis area.  Great way to make connections.