All Forum Posts by: Kirk Gore

Thanks @Stephen Barton I'll look into that! I actually just got licensed in Mississippi and I wasn't aware that you could pull equity lists from the MLS.

For those of you that have had success with marketing to buyers with equity, how are you finding your lists?

I recently purchased a list from Listsource but the equity information was not available for my area and most of my calls that I have received have been sellers with either little or negative equity. In other words, poor candidates for a wholesale! 

Are there any ways to find buyers with equity besides hoping Listsource has the info or am I out of luck for my area?

Thanks!

@Adam K.  Even though a wholesaler doesn't represent the buyer and seller in a "legal" sense (this would definitely be illegal without a license) they still act as a broker to the deal by essentially bringing the buyer and seller together in the same transaction, which to me very similarly resembles dual agency. Like you said earlier, in a very basic sense, a wholesaler is just an unlicensed middleman while a licensee is a licensed middleman. 

That's why to me, the act of wholesaling in general seems almost synonymous with performing licensee duties without a license. As a licensee, getting the seller to agree on a sales price and then selling the property for a higher price and receiving the difference in commission is called a net listing and is illegal in most states. However, when you simply get the property under an assignment contract in your name first, it suddenly becomes legal and a license is no longer required. That's kind of crazy!

I definitely know that wholesaling is perfectly legal, I'm just very interested in this relationship. Being both licensed in Mississippi and interested in wholesaling, I just want to absolutely make sure that I approach both duties ethically and legally.

The line between realtor and wholesaler is a little blurry and that's something that I've been trying very hard to define more clearly as I learn more and more about wholesaling. 

Technically to wholesale this deal, you'd have to get the property you're interested in under contract to "buy" it and then assign it to your cash buyer for the contracted price plus your wholesale fee. The most likely way you can achieve this is by marketing to the all of the properties and then hoping that for at least one of the properties:

A) the owners of the property are motivated to sell, 

B) the owners of the property have substantial equity in the property allowing for them to "sell" it to you for a deep discount, 

C) you can negotiate a price both low enough for you and your buyer to get a good deal while being high enough for your seller to feel comfortable selling,

AND

D) you can get all of this under contract.

In order for you to get paid for simply connecting your cash buyer to the owners of the properties you would need a real estate license.

To my understanding the main difference between wholesaling a property and representing a client as a licensee is that in the wholesale transaction you enter into a contract with the seller to "buy" the property (which really means to assign to another buyer) and in a licensee transaction you enter into a contract to either "represent" a seller, buyer, or both in the selling of a property. Even though as a wholesaler you still technically represent the seller and buyer, the contract assignment loophole seems to exempt you from the necessity of the license.

I'm still learning myself but I hope this helps!

Hey @Michael McDermott that's an awesome question. Considering your background in marketing and your passion for networking and helping people maybe you should consider getting licensed as a realtor. There are many niches you can specialize in with a license and there's certainly a wealth of information to be learned both in the process of getting a license and in the field as an agent. I believe in most states you're required to have a license to be a property manager too, so it could be a great transition into property management if that's also something that you're interested in. Good luck!

@Brian Gibbons that's very interesting and makes a lot of sense. In this particular situation I've discovered that the lead's house is worth around $95,000 in current market conditions but he owes $116,000. Would you suggest taking the deal subject to his mortgage with such a large disparity assuming he would agree to sign an additional note? What amount of additional money via note or otherwise if any would make you feel comfortable enough with the deal to take it? Thanks!

From my understanding, the term "wholesaling" typically just refers to getting a house under contract and then selling it to a cash buyer for a wholesale fee. So even though the signs may claim "we buy houses" what they usually really mean is "we get your house under contract and then find someone else to buy it." That doesn't look as good on an ugly yellow sign though ;) I'm sure that some people who market that they "buy houses" actually do, but overall I think it's more or less just a catchy saying that grabs people's attention.

@Larry Turowski and @Andrew Syrios 

Thanks for the responses guys!

@Daniel Francis  , I actually just got licensed and sponsored by a local broker last month! So legally I can help him with a short sell even though I have absolutely no experience with them. What kind of company would I contact to process a short sell? I plan on calling him back if/when I can get familiar enough with them to feel comfortable helping him through the process.

Thanks for the responses guys!

@Eric F. , He showed an interest in selling despite being underwater and seems fairly motivated so I think he'd be willing to come a little out of pocket to unload the house. I haven't discussed any special kinds of financing yet with him though so I don't know how he'll respond to that.

@Larry Turowski , Is the only difference between a sandwich lease and lease option that the lease option includes the option to buy after a certain amount of time? I'd imagine that for me to be able to cashflow the house with a lease, he'd have to lease me the house at substantially less that the market rent he's getting now so it may not be as good of a deal for him. Is there a way for us both to come out ahead financially using leases?

Also, can you recommend any resources to learn more about the short sell process? Have you had any success with short sells?

Thanks again!

I just received my first call from my direct mail campaign. The lead is an out of state absentee owner who owns the house as a rental and is underwater on his mortgage. He bought the house in 2007 and said if he tried to sell it now he'd have to come out of pocket substantially. He said he's tired of dealing with the property and wants to get rid of it but doesn't know what to do. The house is currently rented with property management. He said he was planning on just renting the house out long term before he got my letter.

What options do I have to help him? Would this be a good candidate for something like a subject to deal or something similar or is this a dead end lead? Thanks!