All Forum Posts by: Eric F.

@Alexandra Preziosi  Do you have a purchase and sale contract in front of you? Look at where you fill out all the numbers. There is a line that should say "Earnest money" That is where you put what you give them when you sign the contract. $100, $500, whatever you actually pay right then you put there. Then there is a balance due which would be the rest. So if you give them $500 when you sign, and the agreed price is $50,000, you would put balance due at closing $49,500. At the bottom you put total purchase price $50,000.  

So you, or your assigned buyer, will need to come up with the $49,500 plus whatever closing costs and fees you are paying at closing to buy the house.

Once you have the contract signed you can look for a buyer. You can assign the contract to the buyer for whatever the difference in price is. So if your buyer will pay 60k, you can do a 10k assignment fee and the buyer brings the money to closing and you get your fee when it closes. Or, you can double close, where you have to pay the $49,500 at closing, take title, then immediately (or the next day or whatever) you sell it to the next buyer for 60k, and you net the difference. 

What you do not, and cannot do, is tell the seller you will find them a buyer. That is acting as an agent. As a wholesaler, you are closing to, or intending to close, on your deal. If someone wants to buy it from you for an assignment fee, then that is fine. I would advise you not to enter into deals you would never close yourself. 

As an aside, as @Ned Carey and @Steve Vaughan touched on, wholesaling is not "easy" or something you can do with "no money." Advertising costs money and you have to know what you are doing. I get 10 horrible deals e-mailed to me every day. Terrible ARVs (and never because they are too low) repair estimate costs I can tell are not even half of what it will really cost, etc. If you sign a deal that is not really a deal hoping to lie your way to getting a buyer it won't work and you will have to back out, going back on your word to the seller and harming your reputation. The only legitimate reasons to back out are title issues or something during an inspection you really did not count on, like a bad structural problem or whatever. These types of things would stop any deal be it a wholesale or a MLS transaction so there is no shame in backing out. Telling someone you can pay more for the property than you really can and then backing out because you can't find a buyer, that is on you.

Disclosure: CPA for 7 years. Did 3 years public followed by 4 years in government (surprisingly I became a 10x better auditor in my government job). Almost all audit. I did some HUD audits of similar low income housing providers.

First, I would advise you to stay at your firm until you become a CPA. Pass the exam as quickly as you can. I put my entire life on hold from a social standpoint and passed all 4 sections first try...under 6 months start to finish. I still keep my license even though I am a full time real estate investor. You have to get your CPA. People who know me will tell you I put very little emphasis on credentials, education, etc. but honestly if someone is in public accounting for 5 years but not a CPA it tells me they don't take life seriously. Getting your CPA is the single biggest thing you can do for you career and if you can't be bothered to study hard for 6 months to get it, then you don't put effort into your life...at least that is how I see it. Believe me, anyone in the position to hire you sees it the same way. Passing the CPA is about discipline. If I ran a CPA firm, first I would jump off a bridge, and if I unfortunately survived I would not hire anyone who has been out of school for 3 years and not passed the exam. 

After you get your license, start looking. First, your current clients are great options. When you are on site pay attention to the jobs there you would enjoy. It sounds cliche, but everyday you are at a client's office you are interviewing for a job. When a client needs to hire someone for a job in finance or accounting, the first place they look is the firm they work with. 

Are there real estate firms you are interested in working with? Call them up and ask "what do you need?" Explain who you are and what you are interested in. If they are not hiring right now, that is fine, ask them what you should do to find a job in the industry with them or not. You will get some good advice and hopefully make a good impression so if they ever are hiring they give you a call.

As for an actual job analyzing deals full time, I'm not sure it exists and if so I doubt it pays a ton. I would probably get bored out of my mind if that is all I did. I would think after getting your CPA you would be overqualified for what is basically a high level data entry and analysis job.

To those who don't rent to tenants with cats, do you rent to tenants with dogs? I have never had a tenant with a cat but I do have ones with dogs. They stay longer and I have never really observed much damage from the dogs. 

"2. Your discussion with investors regarding backyard work 

Haven't paid rent yet - waiting on this information. Please communicate with me (not tim) on this stuff as I will be paying rent going forward"

What does she mean "your discussion with investors regarding backyard work." Did you tell her you were asking other investors how to handle it? What work were you having done? How long was she unable to access it? 

I understand wanting to give her some credit, but I would be hesitant to do so, especially since she is holding you hostage more or less. If my tenant asked nicely I would probably do it, but the way she is doing it, and bringing up this backyard situation, does not seem like a good thing. Whenever people start bringing up old situations my guard gets up.

I had AC go out in one of my rentals when it was really hot (90ish) 2 years ago. It took 10 days to fix, through no fault of mine. I had a guy out there the day the tenant called me (3 days after it went out..she was so nice she did not want to bother me on the weekend) but long story short it was the power company's fault so it took a bit to resolve. I don't understand exactly what happened, but their lines were sending too much energy to the unit and blew it like 3 times. Luckily my tenant was understanding.  I would have happily given her a deduction if she asked nicely but she never did. If she tried to hold me hostage next time rent was due I probably would have not been so happy to give her anything.

PS:

For the record, I informed the tenant next time something broke she should call me right away, weekend or not. She appreciated it. I think when she saw how bothered I was she sat in a hot house for 3 days because she did not want to bother me she realized I was a reasonable landlord and that is why she did not give me a hard time. 

Honestly, the fact he paid rent for 3 months after moving out is good for you and I would consider it lucky. Sure your lease says he still owes it, but he could have just not paid anyway. Have you turned down a tenant you would otherwise have taken since you were getting rent paid anyway? If that is the case I would say you are taking advantage of the situation. 

As for him not living there anymore, I would guess you still have to go through the eviction process. Technically he has the right to move back in tomorrow if he wants. He is still paying rent after all (although he is late).

I have met a lot of people who are in the Rich Dad program but almost all of them seem to disappear after a couple of months. I only know 1 investor who started with them and became successful, but he does not attribute much of his success to Rich Dad. That being said, I am sure they do provide the tools to succeed if you work at it.

I had a local coach I paid when I started. It was worth every penny. I was lucky to receive quality coaching. For every coach that is the real deal, there are many who would rip you off. I met another local coach who I felt bad about and did not go with. I think I made a good decision avoiding him.

If you can find a local coaching group I would go with that. I don't feel like these national groups have high success rates. Of course, real estate in general does not have high success rates. Go 2 years back in the new member forums and see how many are still around.

Check the real estate guru forum and read some reviews before you write a check. 

@Jackie Lange Hi it is me again harassing you about Panama. My fiance (will be wife by the trip) and I are thinking about going back to Boquete in the fall. She has to have a minor medical procedure and we feel like we can pay cash there and basically get the trip for free as compared to messing with insurance and payments in America. Is Hospital Chiriqui good? Our research concluded that it looks like the best one. It is a minor procedure. I might get a bunch of blood tests done for fun while there. We are also considering Leon, Nicaragua which is another place I really liked.

Also, I have not looked into this yet, but are there opportunities to buy a house down there as a long distance investment? I'd prefer one that might be nice to move into one day but even just having a house down there would be great. Hell, if I could get into one for a small amount of cash and break even I'd be happy to have a house outside of America just to diversify my "life options."

PS

Did Big Daddy's really sell to new ownership? Those were the best fish tacos I have had in my entire life. When we go back I'm going to eat them 3 times! I think the owner's name was Mike and he said he knew you.

Thanks

Eric

To update this, and @Account Closed might correct me, but I was told the threshold for a permit is now $15,000. A Raleigh inspector told me this. (update: see below)

Of course 6 months ago I spoke with 2 different people in the Zebulon Inspection Department who told me there was no such thing as a $5,000 construction permit, so I never got one, and when I was talking to the guy in Raleigh he said it was a state law.

I'd feel bad about not getting my permit except when 2 people in the inspection department tell me I don't need a permit my due diligence is done as far as I am concerned.

...

Here it is.. House Bill 255  http://www.ncleg.net/Sessions/2015/Bills/House/PDF...

"(b5) Exclusion for Certain Minor Activities in Residential and Farm Structures. – No building permit shall be required under the Code or any local variance thereof approved under subsection (e) for any construction, installation, repair, replacement, or alteration costing five thousand dollars ($5,000) fifteen thousand dollars ($15,000) or less in any single family residence or farm building unless the work involves:

What you can do depends on your lease. If all of that is covered under it then you can evict for not complying with the lease terms. If you lease doesn't mention spaying your pet or flea prevention, then you cannot do anything about it. 

Sidenote: I'm adding all of this to my lease as well as "no outdoor dogs" which someone mentioned the other day. I allow pets because tenants stay longer, but I need to add some qualifiers.

Another thing I am going to add is the dog can never have attacked anyone. What is the exact term for this? I know in North Carolina if your dog bites someone they get quarantined for 10 days if it is reported. I guess that would be the guideline to prevent them from moving in. Of course, if the tenant did not tell me (and I doubt they would ) I don't see how I would ever know, but at least technically if I find out later I am protected by my lease, because while I love dogs in that instance I would have to evict them.

@Jordan Santiago

"Hello, I am a new wholesaler. What exactly can I do to buy myself the most time to find a buyer, and what can I put in the contract to guarantee I do not have to buy the house?"

Find someone else to teach you if you think this is the point of wholesaling. I understand you are new and most of these gurus talk about all their escape clauses and so forth, so I see why you would think that is important, but it is not. When you put something under contract your thoughts should not be "how can I get out of this" it is "wow, I signed a great deal, how can I make sure it closes?" 

The way to guarantee you don't buy the house is to get a good deal you can sell. I mean there are the subject to partner approval and inspection clauses and stuff like that but forget all that, get a good deal first and foremost. 

Sometimes you have to back out of deals. Maybe the inspection showed 20k of hidden damage. Or you cannot get clean title. Those are fine reasons to back out of deals. Signing a deal and backing out because you cannot sell it is not a great way to do business. Your reputation matters.