All Forum Posts by: Account Closed

There is a guy who did just that in Mishawaka, IN. He was on Biggerpockets since 2013 or so, but stopped posting about 4 years ago. 

He created a good thread about wholesaling , he was very informative and helpful (without any BS/fluff), gave all the valuable information for free (unlike some gurus charging $30K for a course that doesn't do anything for you). You can read his posts here: https://www.biggerpockets.com/forums/12/topics/862964-wholesaling-101-how-to-wholesale-for-beginners

You will see he was attacked with just about every line of arguments you see today from those who badmouth wholesalers. 

 I am rightfully defensive, because instead of attacking the issue you complain of you want to outlaw or regulate to death the industry. Senile 86 years old man was screwed you say? Well, there is remedy for that: anything senile person lacking basic mental skills signs is null and void on the eyes of law. It's as good as if someone forged a signature on a contract by alleging that the seller has agreed and signed it. This sort of thing happens all the time, FYI, and is a common issue in Estates, Will and Trusts. A lot of Wills are executed by people who are medically diagnosed to be mentally disabled, therefore there are a lot of cases where either Sate or disputing heirs take culprits to court. No need to outlaw Wills, Trusts or wholesaling as an industry. No need to create a new regulation stifling wholesalers to death when existing laws make it clear that contract is invalid if signed under duress or by mentally disabled person.

The thing about Craiglist doesn't make sense because those "wholesalers" you describe are like the squirrel on the wheel. They can spam all the ad pages and post all day long what they want, but wholesale deal sells itself and has people lined up for it, because there is a profit on it. If there is a struggle to peddle it then it means it's not a wholesale deal. Market is the best judge of whatever those guys do. If they have a property which has zero demand they will simply fail to benefit from it and eventually be forced out of business (unless they have endless time to keep doing what doesn't earn them a penny). And since wholesalers can't market property to public, they can only assign a contract to end buyer they must reach out directly, the laws on the books should simply be enforced. No need to pass hundreds of laws banning the same thing if no one will enforce them. Just enforce the laws that exist and don't allow for public marketing of property that doesn't belong to a wholesaler.

It's not a "good job" that sells the deal, whatever the definition of "good job" is. It's the NUMBERS that sell. Everyone out there knows an investor who wants to buy the property to flip or fix and rent. There are not enough of those properties at wholesale prices, so there is constant demand for the investment opportunities. That's not to say that there are no wholesale deals posted or available somewhere, it's just that the REAL ones don't stay on market for a day. When I was looking for fix and flip properties I recall seeing dozens of ads for properties with inflated ARV's and not desirable from investor's standpoint. On two occasions I found exactly what I wanted. I used to get text messages, alerts and emails all the time, and I reacted on these two almost as soon as they hit me with notification. And these were not ghost ads, you could see the property address, you could go on MD Landrec, search the title, find a deed and etc. But when I called and asked to see the property it was sold before I could get my hands on it. The others could stay on for long periods of time (and were available for purchase for a month or longer).

Good deals sell quickly, people snatch them right away. The ones that you can't ever find a buyer are not wholesale deals. They are probably dilapidated houses in slow selling area with low ARV and high cost of repair that no investor in his right mind will buy. Of course, once in a while bad deals sell too, but they are not true wholesale deals is what I am trying to say.

 86 years old senile man should hire an attorney to assist him and not sign any papers on his own. There are social service orgs in MD that offer free legal advise to people in such matters if they can't afford to hire an attorney. Also, buying from a senile old man without an attorney can be a costly affair, simply because the contract signed by someone who lacks basic mental abilities is considered null and void in the eyes of law. That property could possibly go back to that man should state become aware and prosecute the case against new owner and everyone involved in the transaction. Heirs or relatives of senile man could bring a legal action of their own, on the grounds that the contract was void and null due to mental disabilities of the seller.

The second example you site also doesn't make much sense to me. First, the wholesaler can't advertise the property on craigslist. You can't sell or market a house as wholesaler, you have to find investors/potential buyers on your own and reach out to them directly, rather than making a public advertisement to get the leads. Latter is illegal. Second, why would wholesaler have to make such enormous efforts and struggle to find a buyer if the deal was a TRUE wholesale deal and not some junk property peddled for retail price? The biggest effort, IMHO, is involved in finding a property at the right price and in the right location. That's what is the most challenging part of the wholesaling, But once you have such property under the contract getting rid of it should not take much effort, unless (as I have repeatedly stated) it's a fake deal. Meaning, it's not a wholesale deal at all but a junk one tries to peddle for the full retail price. 

 #4. What you suggest is factually incorrect. Wholesaler doesn't "get" 100K from end buyer. In fact, wholesaler gets 15K check from titling company, under the terms of the contract assignment. It's not wholesaler who receives $100K, so he can't say "I think I can get 100k". And it's all irrelevant to the objective anyway. Objective being: get seller the amount of dollars he agrees to accept to give up on his property. I would charge one million dollars for each closed deal in assignment fees, IF MARKET CONDITIONS ALLOWED ME. I am the finder and I will charge what I want for doing my work. All parties are free to do their own thing, find end buyers or sellers without using my services. But, it's highly unlikely that I would ever make million bucks on any assignment, unless some seller wanted to gift his million dollar worth home to any buyer for $1 and signed a contract with me. But if I EVER encountered situation like that, make no mistake about it, I WOULD COLLECT MY FAIRLY EARNED $1MIL)) The fact that it will never happen is another subject. What matters is that it's fair and square deal.

#5. Selling contract is exactly what wholesaler can do. No wholesaler can sell a property without first closing on it, simply because wholesaler doesn't own it. So, contract assignment is what you do as a wholesaler. What is the issue with it?

 You should be concrete with your allegations. "They" or "them being dishonest", them "lying, cheating, doing this and that" doesn't tell me anything at all. What exactly happened, who did what, and should I as a wholesaler be responsible for wrongdoings of other wholesalers?

In this business, unlike many other, things are simpler because it's about NUMBERS. NUMBERS matter in this game, not preaching ethics and producing smoke-screens to hide the true agenda.

And NUMBERS don't lie. Pick ANY off market property on the map. Look at comps in MLS, to see how much buyers paid in real world for similarly sized property in the past 6 month. There you will have your ARV. Next, deduct whatever % you think investor will want to make to be interested in acquiring this property. Let's say it's 30%. Then do estimate of the repairs. Hire a contractor if needed, to get exact cost estimates. Deduct that figure from ARV as well. Finally, deduct whatever you think you can squeeze in as your fee for finding this property. Let's say it's $10K (an average assignment fee). The final number will be your MAO, the maximum amount you can afford to offer seller to profit from the deal which will then be attractive enough for an investor to buy. Armed with that information you can now make an offer to seller. Some suggest to start with 85% of MAO and go as high as 100% of MAO before you stop negotiations and tell seller to kick the dust or find a buyer on his own. It's all simple as that. I don't understand what all the "lying", "cheating" and nefarious doings are about. It seems likely that there are some stupid wholesalers who can't do a simple math, wont look up comps in MLS (all it takes a phone call to your RE agent), have no clue about the value of the property and then they try to peddle it to an investor for a retail price. Obviously, those guys will fail, but not because they are liars and cheaters, it's simply because they are inept and don't know what they are doing.

 This is getting off-topic, us discussing Boeing's wrongdoings and its planes falling off the skies like dominoes. My point was: if you are against predator behavior, why not start with criminals at the top, such as Boeing? But since you keep mentioning the issue with Boeing, I will note that the Youtube video I posted is not a media article, it consists of clips of the footage of the US Senate hearing, where US Senators asked questions and Boeing CEO "answered" them (I added quotation marks, because he had no answers for most of the questions, including why Boeing sent US Senate papers with gibberish all over them instead of the production documents that they were required to). 

I also watched a documentary about Boeing planes falling off the skies and how Boeing tried to pin all of them on pilots. I didn't post it here because I don't want to steer off the topic (which is about wholesaling, whether it's coming to an end). But you can Google and watch it yourself, it's made up of interviews with whistleblowers, experts in aviation industry, some government officials and investigative reporters. It's a long one, not just soundbites to make headlines and sell the newspaper. Boeing has changed it's philosophy long before planes started to fall off the skies. You can even find articles written about it by people who presented thorough analytics of what took place in Boeing management before the catastrophic events brought media attention to its' shortcomings. They have essentially took leverages of control in production of planes away from engineers and given them to managers, who were given enough power to overrule engineers on all the matters related to designing, testing and production of the planes. If Boeing had to design a plane in X years and start production in Y months engineers' objections over safety concerns and quality issues no longer mattered. It was managers who were in power to force everyone to do their bidding, and we all saw how it ended. Anyway, this is all very well known, it may not be clear from soundbites if you get all your information mass media news channels on TV, but a little Googling and digging will reveal all the information you seek on this matter. 

I just find it predictable that you would defend Boeing CEO (CEO of the company that caused deaths of hundreds of Americans lately), while at the same time vehemently opposing to wholesaling practices where no one dies, and if crimes are committed the harm can be reversed in court of law if properly prosecuted by AG's and pro-bono attorneys (contracts signed under duress or by seller lacking in basic mental capacities can be nullified in court of law and seller can me made whole, unlike people who died in plane crashes).

 

Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling. 

 Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

Dude your so naive  planes falling out of the sky lately ( all Southwest ) is clearly pilot Error has nothing to do with Boeing.. media reporting on Aircraft incidences is so poor .. they have no clue what they are talking about.. Like when an Engine quits its Boeing.. but Boeing does not make Engines its Pratt and Whitney and GE and Rolls royce make  90% of Jet Engines !  

The Alaska Air flight where the door popped was also a sub contractor issues.

the one that is on Boeing is the MCAS although the flights that crashed were all non US or European carriers .. Pilots could not deal with Runaway Trim.  

 Not sure who is being naive on this. 

https://www.youtube.com/watch?v=-RcnCu7WLxc

I have researched the topic. Good news: it's still a viable business in MD. The communist law proposed in 2023 to outlaw wholesaling didn't pass. What they passed instead is a 2024 bill which mandates wholesalers to disclose property sellers that they would be assigning their contract to a third party. Which is perfectly fine by me. 

Quote from @Nate Marshall:

ment like an interstate compact regarding wholesaling. 

 Oh, please, I don't want to hear words "ethical" and "businessman" in one sentence. It is so hypocritical when someone unethical starts preaching ethics to the rest. Given the fact that people say "ethics" and usually mean "saint, loving and caring to all as Jesus of Nazareth was", the very idea of such "ethics" can't exist in the business environment. Businessmen are predators, they are jungle animals, and bigger the size of the business the more they act like predators. Anyone who is against predators should start from the very top, like Boeing Corp. who makes $*tty planes that keep falling off the skies lately, so CEO can earn tens of millions in bonuses for cutting the costs of production and delivering planes to airlines sooner than the engineers can properly test them for safety issues. That, by the way, is not merely "unethical" (no one would expect a business of such scale to be operated by Jesus-minded CEO), but it's criminal.

There is one thing and one line no one should cross in any business, IMHO: don't commit crimes! Don't murder seller to steal his house, don't get him sign a Deed and steal his house without paying him what you agreed to, don't assign non-existent contract to investor , take his money in cash and run away. There are a lot of DON'Ts in business, wholesaling is no different from the rest. But being like Jesus is not what any businessman must be. As a businessman you don't have to be liked, it's ok to be hated (and you will be hated, make no mistake about it. The more you succeed the more there will be people who will hate your guts for it and will wish to harm you to deprive you of the fruits of your work). So, being hated is perfectly fine with me. I will just mind my business and do exactly what I CAN DO in order to be profitable. Send all your AG's and tap my phones, computers, homes etc. if you wish, I couldn't care less about it. I have learned to be shrewd to survive in a pack of wolves.

First of all there is a new law in the books in state of MD, which takes effect on October 1, 2024, and mandates wholesaler to disclose in the contract that they are wholesalers and will benefit from the assignment of the contract. So, this point is effectively moot. As to your other points, why is it any of your concern how much money wholesaler puts in EMD if seller is happy to get what he is offered? Do you work for CFPB? I will offer $20 to seller in EMD, he can either take it or be stuck with his property. He is free to go find his own buyers and get the most money out of the deal. Who is to say what I have to pay in EMD if sellers agrees to take what I offer?

I have read this forum extensively, ever since I have registered 6 years ago. Here is what my understanding is: almost everyone (not all, though) who persistently badmouths wholesalers doesn't give rats behind about sellers per se, but they are all realtors or brokers. These are people who feel pain in you know where when they see wholesaler walking off with $10K is assigning fee. They feel jealous, angry and motivated to destroy wholesaler, so (as they think) all the assigning fee can sink in their pockets. This is so simple. Knowing people and human nature you find out by the time you reach my age that there is no such a thing as predators caring for sellers. Money is the only factor that moves them and they will lobby the state to pass regulations and laws which will forcefully redistribute share of the pie in their favor. So, there is no moral argument, it's all smoke screen there. Therefore the question I asked earlier remained unanswered.





So, what do you suggest to do with those "buyers" (who are in fact middle-men, the actual buyer is the bank), when their financing falls through and they don't get final approval from underwriters to "help sellers" get rid of the property? May be we should fine and put in jail retail "buyers" when they can't get an actual buyer (a mortgage/bank) to pay for their home and secure a deed of trust with the county government? Or may be we should jail and fine mortgage loan officers who issued pre-approvals and then approved the deal/contract with buyer before underwriters went over every dot and T in all the documents submitted buy seller and retail buyer? Answer this, please. I am curious if you are for applying the same standard for all, or if you have a beef with wholesalers only.