All Forum Posts by: Eric N.
Eric N. has started 4 posts and replied 119 times.
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@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.
I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
I was waiting for you to go to the filing the memorandum you open yourself up to slander of title claim .. thats a slimy move if there ever was one.. I fund a ton of wholesaler stuff I I cant recall a memorandum being recorded when I do my title review.. I review all title commitments personally.
I had a seller who tried to undercut me on a deal. To protect myself, I filed a memo, which she didn’t like. She threatened to take it to the state Attorney General. I told her to go ahead—no skin off my back.
She sent a rambling complaint to the AG, which was full of nonsense. In response, I wrote a detailed 15-page rebuttal with dozens of pages of emails, texts, and exhibits supporting my side. PSA was Exhibit 1. The AG’s office called me two months later to let me know they were closing the case because there was nothing to pursue.
The seller was livid, but she definitely learned a lesson. After a couple of months, I released the title in exchange for a small settlement fee. In the end, she got her lesson, and I didn’t compromise my values.
For anyone not familiar, there’s no such thing as “slander” if you’ve filed a title claim that seller consented to. When the seller signs my Purchase and Sale Agreement (PSA), it usually includes a clause that allows me to file a Memo. Filing it is an easy process—just pay a small fee (usually about $25) to the county clerk to get it on record. Good luck trying to clear that title with a Memo attached!
I don’t deal with crooks, and I don’t compromise with them. I don't lie or misrepresent myself as a wholesaler. No one is entitled to lie, cheat, or steal from me. If they try, there will be consequences—one of which is them not being able to go behind my back and steal the fruits of my labor.
I give my word, and I keep it. When I commit and sign my name, I follow through. Why should anyone think it’s okay to take advantage of my hard work?
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.
I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
in some markets cutting out wholesaler is a very active sport thats why they use me to close on the deals so they cant get cut out they now own them. If title is ready I close in 2 to 3 days done boom..
ONe of the main issues is wholesalers promising to close have no money or like your saying your not going to RISK any of your own money so if you cant assign you walk.. that type of activity also gets sellers in trouble and has created these laws.. wholesalers have simply done this stuff to themselves based on how they operate, thats the bottom line
1. Wholesalers can file memorandum of contract. One more incentive to do everything right, so they can enforce their contract. Do it right , file memo and seller or buyer can't transfer a title without wholesaler releasing it.
2. The legal agreement, PSA, should have an inspection period during which the buyer/wholesaler can walk out without breach of contract. If you let seller know, in writing, that you can walk away during inspection period and then walk away, there is no breach of contract and no crime committed.
I can buy pretty much any property under a certain price point (it's above median retail price in my state). But I will not close on it and buy it, unless it's a great deal and I personally want to own the property. It's foolish to incur double close expenses if I have no intention to keep it, so why add those fees and make it more expensive to end buyer? Just for the sake of bragging that I OWNED it? Who benefits from this foolishness?
It's wrong to lie and hide the fact that you may or intend to assign your contract to third party. But if you put it in Times New Roman 12 and seller signed under it, then who is to say you have engaged in fraud or misrepresentation?
Quote from @Jay Hinrichs:
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Quote from @Jay Hinrichs:
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Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
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Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.
I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
diasgree totally.. the reason these laws are being inacted is not by industry folks its by sellers and buyers getting taken advantage of by less than honest wholesalers to down right crooks.. that is the bottom line. Oregons wholesaler law requires no test so anyone can just make application provide insurance and the bond and off you go.. what it does though is forces wholesalers to be forthright with the transactions no more little white lies to outright lies most wholesalers use to talk people into selling.. or mis representiong big time to buyers.
I get what you’re saying. It’s a free country—or at least it’s supposed to be—so everyone’s entitled to their own opinion. Please feel free to disagree. As for these laws being passed, I’m sure they have a lot more to do with big money interests than with actual consumer protection. The whole “care for the seller” angle seems like a smokescreen to me.
We already have laws that prevent fraud and misrepresentation. Instead of passing new, draconian laws, why not just enforce the ones already on the books? We could focus on going after the real crooks who are breaking the law, rather than outlawing the entire practice of wholesaling, which is what some states are trying to do.
You’re not wrong—there are dishonest people in the business. Wholesalers, sure, but also sellers who sign contracts and then try to cut wholesalers out by going directly to buyers. And don’t even get me started on the buyers (some are licensed brokers) who use Investorlift and other platform to find properties listed and go around wholesalers. It’s a mess across the board, not just with wholesalers.
On my end, I’ve made sure to protect myself with solid contracts and full transparency. I’m not giving anyone a chance to breach my contract and steal my fees. I include a clause stating that I am not a realtor or broker, but the principal in the transaction. I also include a clause reserving the right to reassign my contract. Additionally, I add a clause IN ALL CAPS that clearly states nothing outside of the written contract holds any weight and that the written and signed contract supersedes any other understanding of the parties about the transaction.
I make sure to email and text the seller, saying, "Here is the contract—please review it carefully before signing." Then, I go over it with them by phone or Zoom, sharing my screen and explaining the clauses. Afterward, I send the contract to the title company and pay the earnest money deposit (EMD).
I've learned my lessons and no longer give anyone a chance to breach my contract, undercut me, or steal my fees.
At the end of the day, if we act in good faith we need to hold crooks accountable, not punish an entire industry for the actions of a few bad actors.
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
have you seen the new laws that the state of OREGON just passed.. wholesalers now have to have a specific wholesale license and insurance and a bond.. Plus mandatory dislcosures that must be presented upon first contact.. its quite extensive and I suspect this is going to sweep the nation over the next decades as states keep cracking down on this business. U should take a minute and look it up and read it. someone who is this invested in wholesaler its probably a pretty interesting read.
I’m aware of what's been happening — it’s not just happening in Oregon, but in several other states too including PA. It feels like we’re seeing more and more elements of socialism creeping into the U.S. lately, wedded with the monopoly which is being dominated by established players who seem to thrive on controlling the system. If I were in their shoes, I can’t say I wouldn’t want to keep my position of power and cut everyone else out, either.
The way our system works now, it appears as though you can guard your way at the top by buying your executives in government. Pay for political campaigns, hire lobbyists (often former lawmakers with direct ties to current officials), and suddenly, you’re in a position to shape policy that serves your interests. It's a mechanism that makes it easy to restrict opportunities for the little guy, while benefiting those at the top.
I’m not particularly interested in becoming a real estate agent or broker, but if wholesaling were outlawed across the country, I know I could easily get my license with the help of some contacts in the industry who’d be willing to sponsor me. It’s a relatively simple process, and I could step into that arena if necessary.
But what bothers me is how much more rigid and controlled we’re becoming. It feels as though we’re shifting further away from the ideals the Founders had in mind and veering closer to a system that resembles the controlled, centralized nature of communism. Instead of the individual freedoms and opportunities they envisioned, it seems like we're headed in the opposite direction, where power is increasingly concentrated in the hands of a few.
I don’t have all the answers, but it’s hard not to see the changes happening around us and wonder: Is this the direction we really want to go?
Quote from @Greg Scott:
Quote from @Eric N.:
Quote from @Erik Estrada:
Quote from @S Arely Cavazos Serratos:
We provide a great value to investors but sometimes they don't seem open to new opportunities. What approach works best on you?
It's a numbers game. For every 100 calls, you might get 1 qualified lead. You are better putting your effort in social media marketing, and networking.
It does work, but only if you are highly targeted and specific in your calls.
That's a good rate. My VA rings 1200 numbers a day using multi-line dialers. Our contact rate is 4%. Which sucks. And we hardly get a lead per day. While we need at least 2-30 leads to close a deal. Sometimes I think using Google voice with manual dial would yield better results, due to much higher connection rate.
I would ultimately scale up to 12000 dials a day and hire 10 VA's if I could increase our contact rate to 10-20%. It's a numbers game and you have to hit thousands of people to find ones who are motivated and willing to close in less than a month.
Part of the problem out there may be that the databases suck. Just today I got two phone calls for an LLC that we closed in 2017. That LLC owned exactly one SF property in Garland, TX.
What crappy database out there is suggesting that a defunct LLC still owns a property sold 8 years ago!
Quote from @James Wise:
The only person worse than a cold caller is a door to door salesman. Door to door salesman deserve ever lasting suffering in hell.
Hey James,
I get it – cold callers and door-to-door salespeople can be pretty irritating. I mean, we've all been there, right? But here's the thing: In business, two things truly matter—KPI and legality. Everything else is just noise. As long as those cold calls are bringing in results, they're not going anywhere. I know I will be adding more VA's to my team once I fine tune the lists, quality of leads and accuracy of the skiptraced numbers scrubbed against DNC.
But here’s a little hack to help you out: just don’t pick up calls from unknown numbers. Let them go straight to voicemail – problem solved. Now you can avoid the cold call chaos without having to wish eternal suffering on anyone.
Cheers,
As mentioned above, I know wholesalers who cold call commercial property owners and I am happy it works for them. But I could never figure out how they make it work. With the exception of terrible distressed and irresponsible business owners (yes, there are those), most being in the same business line as me know how to market their property to large number of buyers (including through auctions and MLS), directly bypassing me. I believe it would be a waste of time for me to search for a needle in a haystack. But it's me. Others have different experience and continue cold calling commercial property owners.
When you wholesale you must be able to acquire the property at the price that will make sense to your cash buyer, otherwise it's not worth the paper your contract is printed on. And yes, I have to squeeze in my fee. So, I have a firm ceiling, the MAO I can offer seller. Not because I am greedy or insane, but simply because paying above MAO will result in contract that I will never be able to assign. And I don't think I have good odds doing this when I cold call commercial property owners. So I leave them alone on my part.
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Eric N.:
Quote from @Jay Hinrichs:
Quote from @Ned Carey:
@S Arely Cavazos Serratos
"So how do you know someone has a great marketplace if they don't get the chance to pitch?"
That is a legitimate question. Sometimes I take a call. I can tell in 5 seconds whether the person calling has clue about what they are doing. I have NEVER had someone cold call that could help me. I have on occasion taken a few minutes to help people calling me if I thought they were sincere.
i turn the tables on them.. most of the time its someone just reading off script but if I can get to the owner then I end up pitching them for my services.. especially as states are clamping down on assigning contracts.. thats how I found my Baltimore clients. they cold called me on a deal I took over from ABC.. 125 fundings later still going at it.. And I got out of ABC without getting burned.. One of the very few from what I hear.
Why I Don’t Chase Commercial Landlords for Wholesale Deals
I regularly meet investors at local meetups who are deeply involved in commercial wholesaling. I respect their hustle, their skill sets, and the persistence it takes to make those deals happen. That said, it’s just not for me.
I have zero interest in cold calling commercial landlords and trying to convince them to sell me their multiunit property at a discount. These are folks in the same business as we are—why would they agree to offload a property to me at 60–70 cents on the dollar when they know the game just as well, if not better?
There’ve been a few times when I’ve ended up talking to landlords anyway—mostly took calls from them when they received our DM, or I accidentally included them on a cold call list , in both instances due to lead source improperly filtering our lists. Most of the time, they want above retail, not even close to wholesale numbers. And frankly, I’m not interested in wasting my time chasing those kinds of leads.
thats fine if your talking to me I have zero interest in buying anything.. I just rent my money out to those guys who need to buy inventory so they can either refi and keep or sell to a buy hold investor.. I am just a money renter.. short term and I work in the low balance markets were many in the lending business wont tread..
Keep in mind I am NOT a Broker I lend my own money HUGE difference I dont have to ask underwriting I do my own valuations no apprasials I travel to the markets meet the clients walk the properties set up a program and launch I have done over 4000 of these since 2012. IN the lower priced and lower balance markets I do nothing were i live on the West coast for instance.. Its an under served area of the market that I have penetrated and of course like I said when its our money we can do things NO Broker can do if its in our funding box.
What other ways are there to finance a deal? If you talk about creative financing, that doesn't take any money to purchase. You just pay back lump sum when loan is due or you pay seller the interest on money you owe them for deed you take over. What is your funding box?
I dont use the project as collateral so I never have to foreclose .. 200k and under.. I do a ton of real small balance stuff 20 to 50k.. those are where the money are ..
So, what do you use as collateral? What do you do if your borrower is inept and blows all the money you lend? On flippers side, you are correct about a low range niche that other lenders don't want to enter. But even if there was the lender willing to lend 20K (say, to buy a house in rural area Ohio or Pennsylvania for 7K and spend 13K to rehab and rent it), the biggest issue for borrower would be the profitability. How does borrower make enough money to justify going through all this trouble? Unless he is then flipping the property to rent-to-own buyer, who pays him hundreds of dollars a month on a house acquired for $20K plus closing costs/interest? I am just curious how you make this work. Or how borrower makes it work. May be I am missing a point and you are talking about gap funding or EMD financing, like Pace Morby's gators do?
no gator lending LOL.. low value to me is anything under 200k.. but I do a ton of deals like this buy for 30 to 80k put 20 to 75k value 175 to 225k sell retail.. my clients make 20 to 50k per deal and we do well also.
the 10k stuff is generally my land flippers product that I have. and on those its simply a 50/50 profit split.. but most land deals are in the 25 to 150k range.. although I did just close one for 1.2 mil but thats not my main product. the 175 to 225k fully rehab starter homes fly off the shelf in most parts of the US I work in.. Keep in mind I only have 10 clients I dont work with one offs or begineers.. Just high volume repeat.
I did own a traditional HML company back in the day but we got wiped out from 08 to 2011 in the melt down. at that time I had over 600 loans out and ended up like your alluding to owning 250 some homes.. And I made it through but at tremendous personal loss.. So coming out of that I created a new model in 2012 so that I would never have to foreclose again and its not for everyone and I dont want to work like a broker Its a different model. I create long term relationships and pump our funding in those companies. This precludes the need to do normal HML function of underwriting new borrowers constantly ordering apprasials never seeing in person what I loan on.. I am in fact right now in one of my markets for the next two days and will look at about 8 of our projects and then fly home. Brokers never leave their desk unless of course they are old school and only loan in the city they live in and work in.. And thats OK there are plenty that work that way as well
Glad you found the niche that works for you. Earlier you mentioned how you recruited wholesalers who were bombarding you with cold calls to use your lending product. How did it work with them? I assume you recruited 10 of them and done looking for more, so you still must be bombarded with cold calls that you can't flip and convert to become your clients?
I turned two wholesalers into wholetailers and helped them control inventory as assigning contracts is becoming tough in some markets. So elevated them into TRUE equitable interest through my company.
The majority of my clients buy rehab and sell to turnkey rental investors or they refi and keep .. I have clients that I have helped go from 20 units to over 200 units SFRs that they now own.. I help them scale and of course we make a premium for this service and thats why I stay in that niche. And yes I get bombarded with robo calls and text and so on so forth.. 90% of the time i cant get by the set up person.
But when I do most of the owners of these companies dont want to do anything but what they are doing but the few that want to create thier own portfolios or want to control inventory then we are there to help.
As a full time wholesaler, money for me is not an issue. I work with a lender who pulls my score every six month and keeps my HML qualification and pre-approval limits handy. It takes into account reserves I have to cover the closing costs, fees and interest for the next 6 months. I would say getting money and OWNING something is the easiest path in this business. I am not a proverbial "doesn't have a penny to print his contract on a paper" wholesaler. Owning, buying, getting equitable interest in something is not a big deal to me. What I care about is liability, risk versus reward. I still like wholesaling because it provides the least amount of risk and cost to me. I am all about ME, not someone else. As a sensible for profit business I have to above all think about my priorities, just as other business owners must think of theirs.
Is it tough to find deals in or around big cities saturated with thousands of wholesalers and big players with big budget? You bet. But it's still doable. And still less risk than any other endeavor in RE. But if market keeps cooling off, then it will be a good time to buy and hold, and that's when I may decide not to wholesale or even flip, but buy and hold until numbers go up again.
Quote from @Denise Supplee:
Not sure what you mean? I was speaking of receiving. I do not do any cold calling at all for our club. As a Realtor, I used all other means. People get annoyed at random calls. Nowadays, unknown callers can be silenced or blocked. It does not make sense. Texts would be a better option but even those can get annoying.
You said you prefer emails, I thought you mean you prefer to reach out by email. As a wholesaler I care about two things: KPI and TCPA compliance. No DNC calls. If my KPI justifies cold calls, I will continue hiring VA's to make those. If KPI drops then I have a problem, and it's usually due to data quality or the dialer. Sometimes it's the VA's who can't convert connections to qualified leads.
Cold texts are illegal under current laws and regulations. There are ways to fall into grey area and make it less likely for recipient to complain, but the risk of being hit with $1500 fine per SMS is still there. So, we don't currently do it.