All Forum Posts by: John Hamilton

I guess that is why when I started my little adventure as a real estate investor (wanted to be a wholesaler) I never put up bandit signs, yellow cards or ever told anyone I would buy their house for cash. I knew I didn't have the money, nor did I know any one who did (either a lender or buyer). 

I thought if the shoe were on the other foot, how would I perceive it and like the fact that this bozo messed up the sell of my house, even if that meant a delay? However, if I agree that for a period of time, and for a certain amount of non-refundable EMD, I could let the person do their best to get my house sold, what's wrong with that? However, if they say, if I can't assign, then I buy, and it falls through because they didn't have the intention of buying, I would be pissed. Maybe even consider taking that person to court. EMD or not.

I felt more at ease by telling people in pre-foreclosure their options on how to get out of it with as less pain as possible. Even though I had no f'n clue what the hell I was talking about. Sure, I understood the scripts and the meaning behind the process and was trained what to say. However, I was really messing with lives of people that were already in a mess and I had no means of really helping them. I did this once, and that was it. No more. Same with wholesaling. Never started.

So, even though there were other REI options, with no cash, no assets, no/bad credit and no means, what could I really offer? It was probably a good thing I didn't act and get myself in deeper trouble. I've never bought into the whole be a rich REI with no money or credit with very little risks.

After 5 years of keeping my head in the game, now, I'm more experienced, per se. I make a lot more money and have the means to do things in a right and ethical, not to mention legal, way. If I was to wholesale now, I would disclose everything to the seller and really intend to buy the property if I couldn't assign. That means I have to know how much money I would need in cash-on-hand to get a HML or PLender to accept a loan. I would have to make sure I knew of a GC or rehab experts in case I wanted to tackle a big fixer deal (know rehab costs and schedule to pass on to the buyer or for me if I buy). It's better for me to have an LLC to protect my personal assets and finances in case investments go south and I get sued. I have cash buyers, that I trust, who can come through when needed.

I'm more confident to say, yes I could do a deal, come out successful and end with a win-win-win. No matter what real estate investment strategy I employ.

Due to life struggles, moving around to 4 different states, divorce and personal drama (health and otherwise), I have not been able to pull any kind of deal together. However, it's taken a couple of years to turn my whole outlook and life around to get me to a place I can call myself a real estate investor as I'm going to make a deal this year, come hell or high water. I choose hell as water damage is a *****.

@Reginald S.

It sounds to me like he just wanted your money for wasting his time and could care less about your protection. Also, sounds like he wanted you out of "his" pool (wholesaling or re investing).

Of course, I could be wrong. :)

@Heather Angelo

Nice to meet another colleague. I too am an IT Project Manager, Business Analyst (Governance and Compliance are biggies), and a Process Engineer. Been doing it since 2003 and worked on multiple projects from start-up to enterprise level. Right now, I'm a contractor employed as a Technical Project Manager.

I am working on getting my PMP and Six Sigma certificates, but I'm ok without those. Go figure. However, it doesn't mean I don't know my stuff.

I like the article you posted. That article has been referred to in multiple threads, again and again. It's nice to be able to actually read about the case (the original judgement, the appeals and the turnover). I still don't see what he "did" to get himself in the situation he found himself in. Sounds to me the buyer had a problem with the wholesaler and wanted to cry foul. For what reason? who knows? who cares?

Welcome and dream big. It sounds like you have a good head on your shoulder. I'm sure you will find the best way to do something in real estate investing. We are just like that. :)

I think this topic will be a never ending post on this site, and others, until the end of time or the gurus teach otherwise.

I still feel that just getting your RE license isn't the be all, end all answer to someone who is intending on just wholesaling (assigning contracts). There is too much at stake, in my limited estimation, for a licensed person to be a wholesaler. I have read that a couple of people have been successful at just that. So, I guess it depends on you, as the wholesaler, what you want to invest in and how you want to protect that investment (time, money, blood, sweat and tears).

I believe that transparency and ethical behavior from the wholesaler is imperative. However, If you attend the closing, your seller and buyer close the deal based on the P&S contract you had with the seller, where does your fee (profit) come in? In most situations I've read about, most title companies and attys will have a problem with your role and being assigned a "fee". A double closing would be more appropriate and less "grey".

Having a buyer's list and employing that once you have a contract is not illegal if you flip to one of them. You should have a non-circumvent/non-disclosure with both parties in case they decide to boot you out of the transaction.

Assigning a contract is not illegal, but you'd BETTER read your state's laws to make sure you are not operating in a fashion that gets you fined, imprisoned and lose your business and assets. There are states that are cracking down on wholesalers and will persecute. But, those are few and far between. 

Does it lessen a persons credibility just because they wrote some books, give seminars, write articles, give advice, or as an experienced person (real estate investor in this case) to question their integrity or bias? Whether or not they make billions, should that person not be giving advice? Especially if they are a lawyer? I don't like lawyers, but I have worked with a number of them. They are usually costly, don't know anything, but their respective niche, don't care about your troubles other than what it's going to cost them, and in the end, what are they getting out of the deal. I have yet to find an attorney who exhibits a different behavior. I know I might be generalizing, but that's been my experience.

For me, I have come to believe that you CANNOT do a wholesale deal, let alone any re deal, without putting up some of your own cash and taking some risks. You may not need to have good credit, but most deals don't require good credit. However, there are some lenders that do use your credit as a basis for the loan.

I say if you are upfront with the seller, put down some kind of collateral (money, EMD, Good Faith), have everything spelled out precisely and exacting in the contract, explain your intention (assign, or buy with the option to assign, or outright buy if not assigned or assignable), that is all you need to remain within the legal walls.

I AM NOT A LAWYER, CPA, DOCTOR OR EXPERT!

@Cliff Odom Although I agree that you should learn to do things right, first, you still need to learn what NOT to do.

In project management, you always learn what NOT to do as "lessons learned" when the project has ended or closed, successful or not. There is value is doing this.

Success is maximizing on your strengths AND knowing your weaknesses. Real estate is so complex at times and people get lost instead of applying common sense to work through problems or issues, or just the everyday managing of your investment(s). Some people don't take the time to learn before venturing into something they have no clue, or a little of one.

@Angie Swader $50 is not enough to put up with that. You should charge a service fee every time you have to clean or have something repaired. Or up your monthly fee. I'm assuming you fully manage that place?

Just wondering if that sounds reasonable.

easy come, easy go...well, maybe hard come, hard go in this case.

Glad things worked out for you.

On closing day, if I was told a new tenant moved in and I had no information about this tenant other than the seller's word, I would have delayed closing until I found out the situation. The seller had breeched the contract that you brought to closing. If no delay was offered, walk away. Also, repairs were not done. This was another breech and should have been negotiated during closing. Either cash for those damages now or drop the price. Unless they had been repaired prior to closing.

Your number 1 action is to cut your losses and make that property start working for you (cashflow).

Don't sue, but follow up with letters of the incident to brokers and RE commission. Your agent and the seller's agent both should be investigated for their practices. It sounds more like your agent did it all, or didn't do what he should have. However, the SA may have not disclosed everything, but maybe wasn't asked to. This may take some time an diligence to pursue.

Someone else mentioned this as is the quickest and easiest way to get the troubled tenant out. Pay them to rent a moving truck (2 days should be >$200) or cash for keys (my idea). Payment is due as soon as all furniture is out in the cash case, or reimburse for the moving truck the day they move out. If they don't comply, evict. 

The goal is to get maximum income immediately. If you have no record of what they paid, except for the lease, it's on them to show the receipts. Nevertheless, you have the upper hand as the lease is the binding contract. After they are out, you can sue for damages (rent not paid, cleaning fees and damages).  This will cost you money. They still may not move out. Then, it's time to call the sheriff once you have won the eviction in court.

If your fiance is not interested, she won't be after you're married. Don't force it or use that as a wall. Include her by letting her know what is going on, from a high level. No details, unless she asks. It just may not be her thing.

If she is hesitant because she is afraid that risks your, and her, income/lifestyle, inform her of your knowledge and wisdom and what your risk contingencies are. The more confident you speak about your investment strategies, the more she will be on your side, at least support you.

Mixing family (especially married partners) with business is high risk for disaster as it WILL affect your marriage and your peace of mind, and everything in between (work, friends, family, children, assets, etc). Especially, if things go south and you were not on the same page for the investment(s) that you got hit on. For example, you wanted to minimize your rehab costs and she wants to decorate to her own tastes. Or you really want a particular mutl-family, but all she sees is damaged units, unruly tenants, and less than interested property managers.

Frankly, have a real heart-to-heart talk about your aspirations and get her to indulge her doubts, dislikes or disinterest in real estate. Let her know that you want to do this, whether she is included or not. Justify your case as to why it's important to you.

My plan is 7 years. 

After a few fix and flips for the first couple of years, start buying and holding to get ideal cashflow properties. 

I figure that once I get SFH (5) and multi-family (20 doors) (or a combination thereof) cashflowing, I can think about letting go of my day job. I'll need the time to manage all those properties, from a hands-off perspective, and keep searching for other deals.

I make too much money (though the govt takes a HUGE chunk) to not keep working for now. However, a few hours outside of work every day should give me enough time to hit it hard and fast. If I feel I can let it go sooner, that depends on the investment (as a whole) bottom line.

I'm 50 now, so by 60 for sure. 57, great. Sooner, hallelujah. 2 years, not impossible, but highly improbable. Unless I had a private investor that gave me good rates and unlimited cash reserves, it will have to be the 7 year plan for now.