All Forum Posts by: Eric N.

For agent it definitely makes sense to cold call entities that own commercial properties, especially if the property is in any sort of distress, has code violations and etc. If commercial property owner wants to unload their portfolio, I am sure they won't be thinking of investors, but they may well consider selling through the agent (unless the property is a total mess and won't retail on MLS). So, it just makes it more likely that RE agents would cold call property owners.

As to success rating, the main things that affect KPI are data (skiptracing) and the dialer you use. With best of the list you will get nowhere if you have crappy data. If you do have a good data and a dialer with good connection rate, you would get 1-3 leads per day dialing 4 hours, or 20-60 leads a month. Statistically, one in 55 close and go through. You can do the math. Compare the cost to PPC or PPL at $350-$450 per lead (which will turn out to be garbage if you spend only $3000-$4000 a month), or to DM ($7000 per cycle on 10,000 prospect list, which you have to hit 5 times to get results). SEO takes years to establish, costs a lot if you hire a competent specialists and you won't know if it works or not until after you wait a year and through large amount of money into it. SMS is mostly dead because of TCPA rules. If you have a suggestion for better marketing channel, more efficient and competitive cost wise please enlighten this board. 

I would say landlord was the one crossing a line if he refused to take off the shoes. Sure landlord owns the premises, but does it mean he can walk into the bathroom while their tenant is taking a shower or relieving themselves? I would carry shoe covers, as others suggested, and put them on if I was unwilling to take my shoes off.

There is some of the best education you can get free out there. But it's not free in terms of time and effort one has to put forward to learn. 98% of people won't learn any lessons if you give them the best tools and solutions for free. Only 2% will. And if you are one of 2% you can either pay for the education or get it free. I am serious when I say there are some groups out there where high quality education is provided free. 

 That is not the only or best approach in case if you are investor looking to buy homes. It can work for a contractor, who does great job at fair price. Word of mouth spreads and keeps him busy throughout the year. I know Gen. Contractor who never advertises because he gets more requests for projects than he can handle. I know a realtor whose entire marketing campaign is going to local stores, shopping centers, talking to strangers and giving out his business cards. He is one of the top RE agents in the area, almost all of his clients reach out to him because they saw him face to face. But if you want to buy, let's say, a distressed property in 10 zip codes, you will miss awful a lot of opportunities if you don't do some serious marketing, including cold calling.  One cut doesn't fit all sizes. What works for one type of the business may deliver poor results in another. 

There are some who do commercials and pursue entity owned properties. But most, myself included, exclude them. We still get mixed up data, because data vendors don't have 100% accurate information on all properties. And whenever we inadvertently hit an LLC/inc. or trust, i know it's a waste of time for us. I personally don't want to call another investor like me and ask if they will sell me property at profitable to me price. I can't fathom why the other investor who has the said property can't do what I can do, finance rehab and increase rent, or hire prop manager (if it is in half decent shape) to run it for him. The highest odds to get a deal, of course, would be that the commercial property owner you speak with is in some serious financial distress, might be hit with series of code violations, back taxes and suffers consequences of major mismanagement of finances and negligence, and all the while is unaware of the options to get himself out of the situation as an investor. Yes, those situations are possible, but odds are stacked against us. So, in our company we really try to avoid entities when we do cold calling.

 I did both. I stopped DM and do cold calling now. They say you have to have 5-6 touches for DM to be effective. If you have a list of 10,000 prospects, that's ~$7,000-$12,000 or more per touch (depending on cost of leads you pull and mailer you select). 6 touches = $42,000 to $72,000. On a list of 10,000 prospects. And you have to keep pulling fresh lists and hit newer prospects as the list gets outdated rather quickly. Of course if you get 6 deals , each with assignment fee of $20,000, it will work. But what if you get 6 deals out of it with average assignment fee of $10,000? You might be out of $12,000 ion the spot. Even worse: what if you get only 3 deals and no more than $20,000 in gross fees? You get the math. And the funniest part? Right after sending the mailers the first 50 calls we got were from angry home owners yelling and screaming not to call again. The ones who want to sell may call you a month, two or even a year later. Anyway, it didn't work for me so we stopped after few campaigns. I think DM was working well in the past, prior to and during the COVID. But it is not as effective anymore.

Cold calling is numbers game and takes huge effort and time, that's why we are hiring cold callers. But the cost is great deal less than that of DM. You can hire one for $4-$5 per hour. Put o 4 hour schedule per day to dial 500-1000 numbers per day. Get 50-60 leads and close a deal that may cost you $800 or less. 

SMS would probably be the most efficient to do market, but it's risky. Even if you try your best, use manual texting and avoid transactional words, it is still possible that you will get $1500 fine per text if sued. This is because the texting itself is restricted, regardless of your intent and whether recipient had added their number to DNC list or not. 

 There are some big names out there , like Batch Leads, who allow you to subscribe and pull the set number of leads per months, based on the criteria you select. There are also niche lists that you will have to do some research and leg work to pull, like government code violation lists. These are harder to get, but yield higher results. There is no magic to it, but lots of work and research needed to figure out what you can pull from where. I don't want to post a link and promote anyone here, but there are few great resources you can tap into FREE. With detailed information on what you need to know. Good luck.  

I’ll refrain from commenting on your rambling ad hominems—they don’t deserve to be dignified by my response.

But your role as a broker sheds light on your clear frustration with wholesalers. It seems like you struggle to compete in a fair market, perhaps you are not able to secure clients as a broker, and now your only hope is for state intervention to give you a monopoly on real estate transactions. That explains why you're unable to stay focused on the topic and prefer to resort to hysteria rather than addressing the matter on its merits.

While you continue to stew in resentment, I’ll keep moving forward, wholesaling properties (including in your state, if it’s not outlawed), and securing as many properties as I can. I love assigning contracts. Lack of risk combined with a potential to make decent profit even in lowest priced markets makes it my favorite type of transaction in the real estate. 

In my state, it’s fully legal to do contract assignment, and I assure you of that. People often call it “wholesaling”, but that’s just a folksy term used to describe what is, in the business world, simply contract assignment. This practice is as old as Roman law*. Outlawing it is unconstitutional. Sooner or later, someone will challenge these new laws all the way to the Supreme Court, and we’ll see what the highest court says. Until then, I’ll steer clear of those socialist-inspired and de facto oligarchy-run jurisdictions.

It’s none of my concern how my state defines and regulates agents, because I’m not one. I’m only concerned with my own business.

As for me, I’ve never defined myself as “pairing” a seller with a buyer. If anything, my PSA clearly states that I am a principal, not an agent, broker, or anyone working on someone else’s behalf and earning commissions that come with fiduciary duties.

If you’re curious about the status, obligations, and duties of real estate agents, feel free to contact one of the National Association of Realtors (NAR) associations or check the existing legislative laws. But as I’ve said, it’s none of my concern what they’re doing or how they’re defined.

You’re misinforming members of this forum if you claim that licensing is required in my state to assign a real estate contract. I know some corrupt state legislatures in bed with big money have passed laws outlawing contract assignment in other states, but that’s not the case where I operate. So, why mislead the public? If you don’t know the laws in my state, don’t deceive the public and don't make up things that aren’t in the books.

You say no seller “needs” a wholesaler? Fine. Provided we’re not talking about someone mentally incapacitated, sellers are free to refuse dealing with wholesalers and go find their own buyers. I never tell sellers they need me. In fact, I often suggest they go list their property on the MLS and wait 60 to 180 days to close, so they can get the top offer they want. But good luck selling a dilapidated house with a broken toilet and leaking roof when the market is flooded with new listings and days on market are longer than ever in the post COVID years. Btw, I don’t want to be involved with sellers who want to sell directly or hire an agent as a matter of principle; that’s their choice. It’s a free country.

It seems you’re angry with wholesalers (or "contract assigners," to be precise). Maybe you’ve lost too many sellers to them, and it pains you that someone found a more productive way to do business than you. So, you want the state to impose its power using socialist rhetoric to fool the masses and secure a monopoly for you. Like I said, I stay away from states where the big money pretending to be caring for poor (while making them poor and destitute by economic policies geared to serve solely big corporate interests) have outlawed contract assignment, but we’ll see how this plays out when someone gets fed up and is resourceful enough to take it all the way to SCOTUS and challenge the constitutionality of laws passed by these corrupt state legislators selling their offices to the highest bidder in exchange for campaign contributions and perks.

Contract Assignment: Definition & Overview

Contract assignment is the process by which one party (the assignor) transfers their rights or obligations under a contract to another party (the assignee). In this context, it’s important to note that there are two types of assignments:

• Assignment of Rights: When a party transfers its rights under the contract to someone else (for example, the right to receive payment).

• Delegation of Duties: When a party transfers their duties or obligations under the contract to another party (for example, the obligation to perform services).

In most cases, assignments happen with the consent of all parties involved, especially if the contract contains a specific clause requiring consent for assignments.

History of Contract Assignment

The practice of contract assignment dates back to Roman law, where the concept of cessio (assignment of rights) was already in place. Roman legal principles influenced modern Western legal systems, particularly those in Europe and the United States.

In American legal history, contract law developed alongside the growth of business and commerce. During the 19th century, as the economy expanded, businesses needed mechanisms for more flexible arrangements—assignments helped meet this need by allowing companies to transfer obligations or benefits to other entities, facilitating mergers, acquisitions, and other corporate restructuring processes.

Initially, the legal principle surrounding contract assignments was more rigid. The enforceability of an assignment depended on whether the contract was assignable in the first place. In modern law, however, the freedom of assignment has become more prominent, though some restrictions remain in certain areas.

Contract Assignment in U.S. Business

In the United States, contract assignments are common in business, particularly in industries such as real estate, construction, finance, and intellectual property. However, the specifics can vary depending on the nature of the contract and the parties involved.

1. Real Estate: In real estate transactions, assignments of contracts are often used, especially for flipping properties or when a buyer wishes to transfer the rights of their purchase agreement to another party before closing. For instance, if a buyer has secured a contract to purchase a property but cannot follow through with the purchase, they may assign the contract to another buyer for a fee.

2. Outsourcing and Subcontracting: In industries such as construction and services, companies often delegate duties or assign their contracts to subcontractors or other third parties.

3. Leasing and Financing: Leasing companies may assign lease agreements to other firms, and lenders may assign loans or debts to other financial institutions.

4. Intellectual Property: When a company licenses its intellectual property, such as patents, trademarks, or copyrights, it may assign the rights to another party, either temporarily or permanently.

5. Mergers and Acquisitions: During mergers and acquisitions, companies frequently assign contracts to streamline the transition of obligations and rights.

Contract assignment is a common practice in American business but is typically subject to the terms of the contract itself. Most contracts contain provisions that either allow or restrict assignment.

• Contracts Without Restrictions: Many contracts in business allow assignments without any specific restrictions. This is especially true for contracts where the subject matter (such as the delivery of goods or services) does not rely heavily on the personal performance of the assignor.

• Contracts With Assignment Clauses: Some contracts, particularly in areas like employment, finance, and partnership agreements, will contain specific clauses requiring written consent from the other party to permit an assignment. In these cases, the assignment process can be more complicated, as consent must be negotiated.

• Contracts That Are Not Assignable: Some contracts are simply not assignable, especially if the performance of one of the parties is central to the agreement. This is often the case in contracts related to personal services (such as an actor’s contract with a film studio), as the identity and skills of the individual are central to the contract’s performance.

Legal and Practical Considerations

When it comes to legal and business implications, the practice of assignment raises several important points:

1. Consent: As mentioned, many contracts require that all parties consent to an assignment. If the assignor transfers the rights or obligations without the assignee’s consent, it can result in a breach of contract.

2. Risk: Assigning rights or delegating duties in a contract doesn’t necessarily relieve the original party of its obligations. In some cases, an assignor can still remain liable for the performance of the contract, depending on the nature of the assignment and the contract's specific language.

3. Notice: In some cases, when a contract is assigned, the assignee must notify the other party in writing about the transfer to ensure that payments, communications, or obligations are properly directed.

4. Contract Clarity: It's important that the contract language is clear about whether rights are being assigned or duties are being delegated. Misunderstandings in these areas can lead to disputes over enforcement.

Conclusion

Overall, contract assignment is a well-established practice in American business law and widely used across many industries to facilitate flexibility and the efficient transfer of rights and obligations. However, it's important to note that assignments are governed by the terms set forth in the contract and must adhere to any relevant legal provisions.

One of the things few people will tell you is that finding a property whose owner is willing to sell off market and with significant discount is where you will hit a brick wall most of the time. Even after you put in place a system, hire assistants and hit the prospects consistently (which you must do to get consistent flow of leads in your pipeline), you will discover that most of those sellers are absolutely unwilling to sell at price that would make sense to any investor with half wits. I just spoke with the owner 4 days ago (been nurturing that lead for 4 months) and made her an offer which is $11000 apart from what she will get if she lists it on market. Yes, she was negotiable. Yes, she is motivated (distressed landlord). She is serious about selling. And she came down $40,000 from her initial asking price. Which was already $20,000 below Zillow estimate. She was willing to accept $140,000 for her 3br 2 ba house with ARV around $220,000-$230,000 after you put $70,000 worth of work into it. The problem is we can't make it a viable deal if we pay her anything above $110,000. And we are about $11,000 apart from what she would net on MLS if she lists for $140,000 and waits 90-140 days to close. If she lists for 180K I don't think she will ever sell that house AS IS. So, be prepared to get a lot of those leads as you move forward. The way wholesalers overcome it is not a magic by all means. It's accomplished by volume of marketing. And marketing costs time, effort and money. That's where you will see you margins shrink. I personally think volume wholesalers make zero to $3,000 per deal on most of the deals they lock up and assign, after the cost of marketing and getting them under contract is accounted for. And no one tells you about it. Everyone tells you about greedy wholesalers making fortune on a deal, but no one talks about cost of getting that deal, time wise and money wise. Wholesalers themselves don't disclose this fact because they want to appear upbeat and inflate their financial gains, to market themselves as successful wholesalers. And the rest in the industry just can't stand wholesalers, because everyone sees them as these evil predators going after demented home owners and making a killing each time deal closes. Let these facts sink into you, so you set realistic expectations and know what you are getting into. Yes, you can become successful wholesaling and make a lot of money, but that will require scaling. Scaling requires substantial investment, of your time, sweat and money. It's not going to be a cake walk like most pitches you have heard. But, as poster above said, no business is a cake walk. Wholesaling is no exception. We either do this or go back to 9-5 misery in toxic corporate world.