All Forum Posts by: E. Jacobs

Thank you. As I start getting more deals done, I will have a better feel for my buyers, how reliable they are, and what they're looking for. But before my list gets very big and I build my relationships more, I will be blasting my deals out everywhere I can in addition to just the buyer's on my list. This should help me ensure I find a buyer and also help find new people to add to my list because I know someone who buys from me is a serious investor. And I agree with market dictating the price- maybe if you have a lot of buyers looking at one property you can begin to play around with it.

I didn't know that the inspection period is what you use as your escape. I just thought a lot of people put the contingency about finding a money partner, not inspection. So if you don't find an investor when the contract expires, you use that contingency to protect yourself. And do you usually use 10 or 15 days for the contingency period?

Also, how much earnest money do you use? I don't think I want to use any. And do you usually negotiate for the seller to pay the title search? If not, does this need to be subtracted from your sale price?

I think I'm really getting a grasp for what I need to do to do these deals successfully. It's just trying to work out every little detail so I can visualize everything happening before it actually does. This will help me learn a lot faster and project myself more professionally to sellers and investors by knowing how everything works and being able to answer questions.

Thanks a lot Brian, that was the exact type of response I was looking for. Definite reality check. I agree that marketing is key, and I'm happy to say my beginning budget has been upped to 10K, so I have some room to work with. I also plan to continue living with my parents for a couple years while I get this started, so I will be able to reinvest a high percentage of my profits into building the business. I'm thinking long term here- I'm not trying to get rich quick and I'm willing to make sacrifices.

Now, I have a couple of follow up questions to your response. First off, I think the only unavoidable expenses that I will need to get started will be building a website and making business cards. I will work out of home and use my personal cell to minimize overhead. Bandit signs were definitely at the top of my list. I originally wanted 100, but now I'm thinking 200 would be a better way to spend my money? I definitely have the time to go put them out, and I NEED to get a deal or 2 done before my budget runs out, so I would prefer methods of marketing that require more time and less money. As for your direct mail, who are you sending your mail to, and what sources are you getting those lists from? I've heard probate lists do well- is this the type of marketing you mean? Also, do you think I should spend money marketing for cash buyers or should I let the deal bring in the buyers?

I'm also curious how your partner can spend 360K a year on expenses and still turn a nice profit from 60 deals. Even if you receive 6K from each assignment, that's breakeven. What would you say an average assignment fee is?

Lastly, how many deals are you doing a year now? I'm curious what strategy you took to get from 7 deals in your first year to wherever you are now. Do you build momentum as you get more deals done which makes it easier to expand? Are referrals a key part of your business? Thanks a lot- you've been a great help.

Quick question. After you have the property under contract, do you:

1) Set a low list price to try starting a bidding war
2) Set the list price to reflect your desired profit
3) Set the list price higher than your desired profit since investors might offer below what you're asking

Randall, I'm not sure I fully understood your post, but here's what I think. First, I will definitely disclose everything. I will pretty much make it sound like I am there inspecting the house and making an offer on behalf of my "company" of cash investors. This way, they will know that I do plan on showing the property to others and will think that this is just so I can seek approval from my partners and get the sellers the cash they wanted. I don't want them ever thinking I personally will buy the property, because they will obviously find out that's not true, and I want to build a good reputation. I will play myself off as more of a "rep" for the other investors who will be seeing the property, and I will explain to the sellers (if they ask) that the reason they couldn't just sell it themselves to these people is because I have spent a lot of time and money networking with cash investors and building relationships with them. If not for me, you would have a very difficult time reaching these people and that is why I am entitled to a wholesaling fee.

Your next point was about EMD. As the wholesaler, I plan to put down nothing in EMD with the seller, but I will ask for a $500 deposit up front to be applied to the total assignment fee at closing. This is standard right? I definitely won't put earnest money in with the sellers. If they ask about it, which people have said only a few do, I will say that is against my company policies and that it is not necessary because we are professionals, we do this all the time, and we want to buy the house or else we won't make money. We wouldn't be making you an offer in 2 days if we weren't serious about doing business.

As far as the pre-title check, do I just call and ask the title companies if they offer courtesy title checks? Does the location of the closing have to be near the seller?

Resurrecting an old thread...

Does anyone have any information regarding court opinions on the "contingent on approval from money partners" weasel clause? Are there any more valid clauses that can be used? I'm not out to be a weasel, but I definitely can't afford to be forced to buy someone's house if I can't find a buyer.

I'm sorry- I tried searching the wholesaling forum for "escrow" and nothing at all came up. I'm not sure if I did something wrong here. Anyways, I'll do further investigating

Can someone briefly explain the timeline of a wholesaling deal? Let's say day one I receive a call and find out there's equity in a property. I make an appointment to go see it the next day, and analyze the comps that night so I have an estimated value in my head when I go see it. I look at the house, and tell the sellers I'll have my offer in... 2 days? 1 day? What more research do I need to do after I see the house to make my offer? Say 2 days later I make an offer, and they accept. I have 45 days to close. When do we open escrow? How easy is it to assign the contract before opening escrow (so you can avoid the closing)? When is a title search done and who pays for it? Once I find a buyer, how do I ensure that they close in time? What if there's 10 days left in the contract period and a hard money investor comes along with my only offer. Is it risky to see if he will get financing in time? Thanks!

I know this is a very broad question, but I'm just wondering how many deals you were able to do in your first year of wholesaling. Answers can probably range from 0 to 100, who knows. I'm just trying to gauge some kind of projected deal flow so I know what kind of expenses I can afford for marketing and building my business and also so I can tell if I'm doing well or need to be making changes. I'm sure it will start off slow, and my budget right now is probably between 1 or 2 thousand to get up and running. I'll spend this making a website, business cards, bandit signs, some ads, and other forms of advertising. My goal, however, is to get as big as possible as fast as possible. I mean doing this full time and if I'm not out networking, looking at properties, or finding leads, then I'm reading books with new ideas and new strategies to try and implement. I am going to take my wholesaling business VERY seriously. I'm not afraid of doing my first deal. I can't wait to do my first deal. And then 2nd, 3rd, 4th, 5th, and so on. I'm going to do it and I'm not looking back (except to learn from mistakes). My goal is to do 10 deals in 2010 starting in May and at least 30-40 in all of 2011. I'm wondering if this realistic or if I'm setting myself up to be disappointed. Even if I fall short, I am not giving up. I am going to work harder and be more creative. I know real estate is my passion and wholesaling is a concept that I've been studying nonstop over the past few months, and I believe I can do it. What I don't know, however, is what are good expectations. I don't know any wholesalers and I have nothing to base success off of. Of course, I have my own definition of success based on how much I can make and how many deals I can do, but I guess I'm trying to find out how realistic my goals are. I know many will say that just doing my first deal is a great success, which it is, but I want more than that for myself. I want to be able to take care of myself and my family financially, which means I want to be doing several deals/month. Anyone with experience have some advice to guide this newbie?? Should I even be worrying about this right now?

Love this thread. And good point Paul. How can you start to fail if you fail to start?