All Forum Posts by: Barry Pekin

@April L. Williams,

It's an easy enough process to do it all yourself.  If you feel like you need someone to help you learn, that it might not be a bad idea.  I had a couple of people say they were interesting in maybe working together, but it never went anywhere.

Just be ready to do a lot of hard work.

@April L. Williams,

You need to check with local people to be certain.  I'm in Virginia, and all I need is a title company.  Of course, they need to be wholesaler friendly.  Some title companies don't even know what wholesaling is.

@Lee Yang

The standard formula works around here. (ARV * 70%) - Repairs - Wholesale Fee.

Some people I know vary on the 70%.  Some higher and some lower.  Lately it's been a little lower for some, but not as a rule.  It all depends on the buyer and what they're looking for.

@Tameika Craig,

A lot of this depends on your contract.  You should have a DD clause in there that would let you back out if there are things that make this deal go south (like undisclosed violations, fines, etc.).

If he says you can't go in there until his lawyer reviews the contract, again, what's in your contract.  Does your contract say that you can have access?  If so, under what circumstances?  It would be nice to be able to go directly to his lawyer, but don't count on it.  His "lawyer" may not even exist, and he's trying to not honor the contract.  That's a possibility, anyway.

The key here is to have good contracts.

@Lavon Newborn,

You can setup an LLC yourself simply by going to your State Corporation Commission (at least that's what it's called in Virginia) and filing all of the required forms. You can use yourself as the Registered Agent, and then be done with it.

By doing it properly, I mean going through a company that has experience setting up an LLC for real estate investors. You really should have a company that acts as a Registered Agent as part of their business. I've missed a couple of filings here and there over the years. They get the notifications and make sure I take care of them. It also makes it that much harder for someone to know who owns the LLC, and there's an extra little layer of protection when that's in place.

I would also talk to an accountant familiar with setting up businesses and their accounting.  You want to make sure you're doing the taxes not only properly, but with the best benefit to you.  For example, if you're self-employed, you have to pay self-employment taxes on all of your income.  If you have an entity, you can draw a salary or commission on part of the income, and the rest becomes a draw/distribution.  You don't pay self-employment taxes on the distributions.  You can also, if you do it legitimately, hire your children (if you have any).  They usually pay taxes at a much lower rate than you do.  You can then have them cover some of their own expenses (school supplies, clothing, etc.) from their salary, using money that was taxed at a lower rate.

This is all just off the top of my head, of course.  I have a few LLCs, and I make sure to do those things where I can - legitimately!  I also make sure to maximize my expenses where I can.  An example of that is to combine personal driving with business driving.  When you do that, it can become a write-off.

Of course, I'm neither an attorney or an accountant, so take this all as my opinion formed from personal experience.  PLEASE - consult your own professionals.

@Lavon Newborn,

I'm a big fan of having an actual business entity to work through.  It adds legitimacy and also gives you a little more incentive to make it work.  It also gives you some extra protection and tax incentives as long as you set it up properly.

That said, you can certainly work just in your name to start.

When you're ready to setup your LLC, do your homework. Consult with the proper professionals to make sure it's setup properly and look into how you can maximize your tax savings.

@Niakam Kazemi,

If you're wholesaling, you have the property under contract, but you don't own it.  So... when you are selling, you are selling the contract, not the property.  It's a nuance, but it's important and you have to make that clear when marketing to sell it.

Feel free to send me a PM.  I'd like to see your site.

@Kody Ward,

When looking for deals, nothing beats personal effort.  You can cold call, drive for dollars, send mail, etc., but you need to do something; you need to do it consistently, and you need to do it often.  Pick what works for you, and stick with it based on your situation and personality.  No one can really answer that for you.

As far as finding buyers, you need to be doing that all the time.  Network, network, and network some more.  Get to know buyers.  There are a bazillion of them out there.  There's no limit to the number of investors looking for deals.  Get to know them and what they're looking for.  When you find a deal, you should have several people lined up that are looking for what you have.

@Thaddeus Abram,

All of the data that's available online is gathered through several different sources.  As an IT person, I've come to realize that no matter what the source, you have to expect there to be errors or missing data.

Listen to the seller, work with a title company, and get the definitive answer that way.

FWIW, I haven't found PropStream to be wrong very often.   In fact, I was looking at a place just today, and I was surprised to see a sale listed from earlier this month.

@Kerim Kerimov,

There's no way to get around marketing.  You need to get yourself out there in front of sellers, not to mention networking with buyers.  On a positive note, the "cost" of this can be any combination of effort and/or dollars.

It's also very important to understand the process.  When you do contact a seller, or they contact you, you need to understand what you're doing and how you are going to help THEM!  This is not about how you can get their house under contract as much as it is about how you can help them.

If you're concerned about proof of funds, then you're doing it wrong.  Be honest with your buyers.  You don't plan on buying their house.  You plan on networking with your partner investors to find someone who will want to buy their house.

And as far as on-market deals being a great way to find deals, I couldn't disagree more.  It's a great way to find to find houses for sale, but not a great way to find potential deals.  It's interesting.  In my small neighborhood, several houses have recently gone up for sale.  They're being listed with realtors and the sellers are hoping to get top-dollar.  And then there is this one house that suddenly started undergoing a renovation.  It took a few months, but they did a bit of work and then listed it for sale.  Yep... this was an investor.  They found an OFF-MARKET deal, grabbed it, fixed it up, and sold it.  My point is that those deals are out there.  You have to work to find them.  They are NOT going to drop into your lap.