All Forum Posts by: Lenzy Ruffin

@Sandy Weed

https://www.biggerpockets.com/renewsblog/2014/02/1...

Talk to investors in your market to find out what percentage to use in your calculations.

@Maikel Figueredo, I think you missed the point that @Adrien C. was making. You can put an MLS-listed property under contract and wholesale it. It's done by wholesalers all over the country by assigning the contract through whatever is the local convention for contract assignment. You will need to show proof of funds, though, regardless of using a contract or LOI or anything else. The listing agent is going to require that you prove that you can buy the house.

The point Adrien was making is that the property you're looking it is not a good wholesale candidate. If it's been listed for over 100 days, everybody who has an Internet connection and invests in your market knows that property is for sale and nobody is interested in buying it at that price. So who is going to buy it from you at the list price plus your markup?

If you can negotiate the seller down to a wholesale price and put the property under contract, that's something entirely different. At that point, you'd be offering your buyers a deal that is not available on MLS.

You should check with a local REIA to see how others in your market are wholesaling MLS properties. The paperwork, addenda, name on the contract (your name or LLC), etc...all these things are done differently in different localities, so the best way to find out how it's done where you are is to ask someone local who is doing it.

Welcome to BP, @Sovat C..

Welcome to BP @Shawn Gageby. I market to homeowner's in Prince George's county, MD. I'll send you a colleague request so we can trade info and see how we can help each other. 

@Michael Morgan

Dude, is that a trick question? You've got a goldmine, man! Not only can they give you the scoop on rehab costs, they can connect you with a variety of other people who you will need on your team to be a successful real estate investor. Those guys will know agents who can help you buy and sell properties. Those agents will know title companies that you can use to do your title work. Those title companies can be a goldmine of information once you start sending work their way. From what I've read on BP, title companies can generate all kinds of data that will be useful to your business once you've established a relationship with them. Just by virtue of what they do, those guys might come across homeowners from time to time who have a house they want to just be done with. You might get a deal flow of some sort just from that.

Read The Millionaire Real Estate Investor by Gary Keller. That might also help you determine what kind of investor you want to be and it will explain the need to build a team to be successful. You are so far ahead of the game if you have people who you can trust in the building trades. It's easy to find out how much a house will be worth after it's fixed up. If you have people who can tell you how much it will cost to fix it up, then you have all the info you need to be a wholesaler or a rehabber.

Your friends might also be able to connect you with experienced investors in your market that they've done work for. You might make two phone calls and find yourself with a local mentor, man. Give it a shot. Figure out what you want to do and then tell all your buddies. It sounds like you have a lot of tools laid out on the table in front of you and don't realize it. Pick those bad boys up and put them to work.

@Michael Morgan

Definitely get out in the field and network with people and you can also find out everything you need to know about wholesaling here on BP. As far as property evaluation goes, you'll need to learn the 70% rule (65% in some markets). There's plenty of info on it on BP. I gave a short explanation on another forum thread the other day. 

https://www.biggerpockets.com/forums/311/topics/25...

There are other rules/guidelines for evaluating a property depending on what your exit strategy is. The 70% rule is a good for wholesaling or rehabbing. For rental evaluation, check out these posts:

https://www.biggerpockets.com/renewsblog/2013/01/1...

https://www.biggerpockets.com/renewsblog/2010/06/3...

In the beginning, the hardest part of doing the evaluation will be determining what the repair costs are for the various components of a rehab in your market. BP has a book on how to estimate rehab costs, you just have to find out how much each line item costs in your market (how much does it cost to install a toilet in your area, for example).

As far as building capital, check out the BP book on Investing With Low and No Money Down. Again, you have to determine what kind of investing you want to do first, then you can find ways to fund it. Wholesaling is a great way to generate cash once you build a successful wholesaling system, but you have to put out quite a bit of marketing money up front before it starts to result in a deal flow that generates that cash.

There's unlimited info here on BP. Everything you could ever want to know is in here. I know the website can be overwhelming, but it becomes less so the more time you spend on it. I'd suggest starting with the Ultimate Beginner's Guide to figure out what kind of investor you want to be. Then, go through the podcast archive and listen to shows where the guest is someone who is doing what you want to do. From that, you'll end up with all kinds of specific questions that will lead you to search the site for specific things and subscribe to specific forums and set up specific keyword alerts and then the infinite collective wisdom of BP becomes more manageable.

Welcome to BP, @Tom Ayd. 

@Kimberly H., I don't own any properties, but buy and hold is my end game, so I've been studying it on BP quite a bit while I work to master wholesaling. I'd like to offer a couple of things I've learned:

1) Define your criteria and stick to them. Period. Whether it's your criteria for buying a property or your criteria for screening tenants, you defined those criteria for a reason: to protect yourself from making bad decisions.

2) From what I've read, if you were to make an exception to your credit score criteria for this person, then you'd be setting yourself up for someone down the road to be able to make a discrimination case because you are not screening all applicants uniformly. If you let her slide with a 556, how then do you reject someone down the road with a 580? If I'm wrong on this point, someone please correct me.

Wholesaling is hard, @Michael Morgan. I wouldn't recommend you start with it. I do recommend you learn how to evaluate property value like a professional wholesaler (a professional...not one of the ones who give wholesalers a bad name by trying to sell overpriced properties), and use that knowledge to pursue other investing avenues like rehab or buy/hold. If you know how to determine the value of a property based on the cost of the repairs needed to bring it to retail condition, then you can let wholesalers do the work to bring you deals and you'll know if it's a true deal or not. Or you could work with an agent to make offers on MLS properties.

Once you learn how to evaluate properties for resale or rental, you can pursue whatever your end goal is. You have to do as @Adrien C. suggested and start by defining what that end goal is. Read the BP Ultimate Beginner's Guide to see what your options are. Wholesaling is not a way to get into real estate with no money and it is definitely not passive income. You don't have to start out wholesaling and move on to something else. You can just start with whatever it is you want to end up doing. 

That said, if you think you would enjoy the difficult, daily grind of wholesaling (and you can fund it) and the benefits of being the person who turns over stones and finds the best deals are appealing to you, then by all means start with wholesaling. Just know that wholesaling is hard. The only people who tell you it isn't have a system or program to sell you.

Welcome to the community.