All Forum Posts by: Maurice Smith

@Kiera Roberts How are you? Let's cover some basics. You mentioned a Wholesale agreement; what you are referring to would be a Purchase and Sale Agreement. You will see them come titled/referred to in many ways, but essentially it sets forth the terms of the sale and purchase of real property between two parties. It states how, when, and under what circumstances each party must perform. For the purposes of "wholesaling" you should have certain clauses that address the aspects of a "wholesale" transaction; such as, Purchase Price, Earnest Money, Due-diligence Period, and Assignment (to name a few). 

The Assignment Contract/Agreement sets forth the terms of the assignment of your equitable interest to another party (your end-buyer), namely your Assignment Fee and End-Buyer Earnest money, etc. 

Please be cautious, contracts should be produced by professionals and understanding what they mean for each party is why attorneys are around. Don't skimp on this part; speak with a closing attorney/title company well versed in assignments and your state RE laws. 

Recommendation: 

You can obviously get an attorney to draw up specific contracts for you, but I will share a few simple ways to get the contracts you need to get started:

1. Visit your local REIA meeting and network. Identify title companies and/or closing attorneys that close wholesale deals in your market. They will normally have a standard purchase and sale contract (A-B) and a standard assignment (B-C).
2. You could also network with other wholesalers and see if they will share a contract that they use in their business.
3. Lastly, you could visit https://www.therealmaxwell.com..., he has his basic contracts available at no charge.

NOTE: No matter who or where you get your legal documents from, please invest some time, and if necessary some money in reviewing the contracts with an attorney. Again, contracts are legal documents and you need to understand what each clause means for you, the seller, and your end-buyer.

Knowledge is your greatest asset and a critical key to a successful transaction. Message me if you need to know more about wholesale in general, or have other specific questions.

@Shelton Turner How are you? Our company operates in NC, perhaps we can make a recommendation. What area are you planning to begin wholesaling? NC is an Attorney State, so you will need a real estate closing attorney, some operate title companies on top of their practice, but no matter what, at the closing table, it's the attorney.

As far as GCs, check for them at your local REIA. Often they will be sponsors or have adds in the REIA material. You could also ask for a reference from other investors, and you could also stop by any active flips you see and ask for the GC. Introduce yourself, ask for a card.

@Cameron Bevens You can obviously get an attorney to draw up specific contracts for you, but I will share a few simple ways to get the contracts you need to get started:

1. Visit your local REIA meeting and network. Identify title companies and/or closing attorneys that close wholesale deals in your market. They will normally have a standard purchase and sale contract (A-B) and a standard assignment (B-C).
2. You could also network with other wholesalers and see if they will share a contract that they use in their business.
3. Lastly, you could visit https://www.therealmaxwell.com..., he has his basic contracts available at no charge.

NOTE: No matter who or where you get your legal documents from, please invest some time, and if necessary some money in reviewing the contracts with an attorney. Contracts are legal documents and you need to understand what each clause means for you, the seller, and your end-buyer. 

Knowledge is your greatest asset and a critical key to a successful transaction. Message me if you need to know more about wholesale in general, or have other specific questions.

@Christian Esparza Here are a few quick tips: 

1) Read "Flipping Houses for Dummies" it's a good basic run through of the process. There are other books out there, but I have personally read this one. 

2) Understand that Wholesaling is really just an exit strategy amongst a number, so depending on the particulars of a deal (project) you may want to limit your risk exposure by selling your interest in the deal to another investor. Putting on my Project Management hat, we'd call that transferring risk. Essentially, exit quickly for a fee, versus tying your money and time up into a rehab.

3) As far as capital, money follows a good deal. If you are truly looking to fix and flip properties, start attending your local REIA and get to know the Hard Money Lenders. Leverage can be your best friend, but understand what carrying costs are and how to structure that into your numbers. You'll also need some skin in the game with this approach too, so if you have some funds that's good. Learn how much of the deal they'll fund, both acquisition and rehab, how they handle draws, etc.

4) As you build a track record, learn about Private Money and get to a point where you can access that to close deals and fund projects.

5) If you go the wholesaling route (primarily), consider strategically balancing the number of assignments and double-closings you close, and depending on your average spread per deal, every 7-10 properties, either hold it or fix-and-flip it yourself. I kind of look it as similar to diversification on the market. Don't put all your eggs in one basket, spread your money and risk out.

6) Lastly, everything mentioned above has various legal and tax implications, so talk to some professionals and gain a decent  understanding of those factors.

Happy Investing!

@Kiaunte Lester I'd recommend taking time to get a firm grasp on the basics as a first step. You can spend very little money purchasing a few books about wholesale here or there. Also, attend your local REIA meetings, network and start identifying cash buyers and lenders.

Intent is important, so either come in understanding what your cash buyers will view as a deal so your confident you can move your assignment, or approach each deal like you might need to fix and flip it yourself. Your hard money folks are great resources for this. Transactional funding is great for double closing.

I guess to keep it shirt for now, learn what you need to know about Acquisitions and Disposition and learn about fix-and-flip. While you ultimately may not take down the deal yourself, you do need to understand how and investor would approach that deal and the basic numbers, like determining Comps, ARV, estimating rehab, considering other payments that may come from the proceeds of a sale, such as mortgages, etc.

This knowledge will help you structure good deals that move quickly. I know some say just jump in. Not my recommendation, lay a strong foundation first. Buildings with shoddy foundations can collapse easily, same goes for business models.

@Taronda Ransom 

1. What are the best marketing tools for finding deals?

There are many options when it comes to marketing and the reality is it all boils down to your ethics, capital on-hand, local laws.

Capital on-hand: Starting with the basics and in order of expense (least to greatest); 1. Word-of-mouth (on the ground in the community), 2. Cold-calling, 3. Ringless Voicemail, 4. Text Messaging, 5. Bandit Signs, 6. Direct Mail Marketing, 7. Search Engine Optimized Website.

Ethics: We don’t use all of the above in our business because of the legalities and ethical implications. Every business owner has to make these decisions for themselves about their operations. We use Word-of-mouth, Cold-calling (but strictly numbers that are not on the DNC), Direct Mail Marketing (targeted to highly motivated properties), and an SEO Website (mostly warm leads that want to talk to you).

Laws: As it pertains to local laws, do your due diligence and be aware of what you can and cannot do as far as marketing is concerned in your target market.

2. What are some of the best practices for building a strong buyers list? How do you find potential buyers?

Best Practices:

• Start attending your local REIA meeting, get to know everyone; including, lenders, investors, and other wholesalers.
• Ask the investors what they primarily focus on fix and flip or buy-and-hold. There are other types but these are two to start with. Ask them what is in their buy box? Take note.
• Get Propstream, if someone says they are a cash buyer, qualify them by looking at other recent purchases, ask for an address, or search the register of deeds (then use Propstream to examine linked properties). You can see the frequency at which they buy and hold properties by examining the sale history of the property (you could also do this on the register of deeds site).
• When you have the funds invest in a good CRM/database and have a module or app to keep track of your cash buyers. Group them by investment strategies, preferences, etc. This allows you to be surgical with your deals.
• Learn how your cash buyers view the numbers or develop a strategy to quickly gauge where they need to be on rehab, ARV, neighborhoods, etc. (this decreases your time to dispo and builds confidence).
• You only need a handful of consistent (very liquid buyers) to keep your pipeline moving.

Finding Cash Buyers:

• If you get a subscription to Propstream, you can type in any City and State, or Zipcode and click the cash buyers filter. It will pull back properties purchased using cash. I like to filter the owner type by “corporate.” Most cash buyers that regularly purchase, flip, or buy-and-hold will normally have an entity or entities that they use to conduct business. From there, grab the entity name, do a search of the Secretary of State’s corporation site, retrieve the filing documents; some will have a phone number listed, others just an address. Use this info to reach out and add them to your buyers' list. If you can’t find “members” or owners of the entity, try contacting the Registered Agent, they may potentially be able to assist (not in all cases).
• As mentioned before, the REIA.
• Network with wholesaler-friendly agents. There are many out there, but not so much on the internet, I’ve met plenty at the REIAs and in other investor circles.
• Visit the next real estate tax auction at the county courthouse. The folks bidding on properties, more often than not are cash buyers or their surrogates. Introduce yourself, get a business card if they have one. See how you can contact them if and when you have a deal.
• Partner with an established wholesaler, JV a deal and learn who is who (cash buyers) in the area.
• If you see an active flip going on at a property, stop by, introduce yourself to the GC or other contractors. See if they can share with you who is flipping the house. Network.
• Many times, you’ll find GCs looking for a flip here and there as well.

Deirdre Brown is a good option. She owns Lexicon Title in DC. You can find their profile on BiggerPockets. 

@Saeed Bayani Yes we use Velocity REO and send a contract photographer to walk the property. They get all the vital pics. It costs about $25-30 per order. If needed we can even get video for around $50.

For flips they will perform inspections as well to support oversight of your project. Not sure of the cost but they have a pretty reasonable operation and decent area coverage.

Our experience with their customer service had been decent as well. So yes it can be done.

@Tyrelle Johnson Velocity REO. We use the Investor package in most instances. Grabs most of the essential shots.

Once the agent/contractor completes the photos, her or she uploads them to our portal and they flow into our CRM (Podio).

From there we can gauge the rehab pretty well. We always explicitly request shots of the roof, HVAC, Water heater, Electric panel, and all major rooms, exterior, and the neighborhood.

$25-28 a job.

@Elizabeth E Lewis Just a recommendation. BP would not be a place where I’d post a wholesale deal. Instead, network and build a cash buyer list from BP.

That said, since time is of the essence, I’d recommend you download PropStream (if you don’t have it already) get a trial version, then do the following:

1. Enter your subject property address

2. Click the cash buyers filter at the top

3. Use the free form pen tool draw a circle around the neighborhood/subdivision (usually defined by major streets).

4. All the properties that have an LLC as an owner and have fairly recent purchases, are a good bet.

5. Go to the State Secretary’s website plug in the name of the entity, click on filing history open up their most recent annual report and many will have a phone number listed. Some will have members listed, in some instance you can try the registered agent (last resort).

6. If no number is present you have three options skip trace the member (s), send a letter, or if you can find a website send an email.

Written out it seems like a lot, but it’s really not that time consuming. Maybe 20-30 minutes and you can have a pretty good list of folks to reach out to.

You could also reach out to your local REIA, plenty of cash buyers there as well they may like your deal.