All Forum Posts by: Michael Lewis Lee

Hello Annette!  Wholesaling is legal but made to sound good to do by people that are most interested by taking your money.  I don't know how long you've been on the Internet but it is full of crooks fighting on taking advantage of you.  You can tend to do whatever on the Internet but it is not very well policed.  The one thing they won't tell you is that you have to lie or withhold what you are really doing and there are back-stabbers in wholesaling that try to cheat you from their experience.  Sure you can do that without any money but to do it right you need to have marketing expenses to do it right. 

There is no licensing involved in wholesaling and its not necessarily bad but it is more difficult than what others say from finding one and then trying to find a buyer.  Most often you have to withhold what you are really doing.  They sometimes have to withhold your mission and budget for two different closing because some owners get ticked off when they finding out about your profit.  You are better off finding a title company or Attorney that will do that and have two consecutive closings.  

Some Owners are OK with you making money and can know what's going on for real and require you to let the Buyer close the deal directly and have only one closing.  That is mainly up to you to tell the Owner what's really going on based on your opinion.  To do this is how you were raised and or can be a liar.  Some people can do that and others can't.

I think it might be better and easier to ask the owner if they will finance your deal in lieu of being a wholesaler.  I have been involved with real estate sales and construction for about 30 years around Dallas, Texas.  Most types of real estate is difficult, it's just they way you choose to go and if you have saved money to help with the way you need to go.

You can also get 0% credit cards to help you get started as long as you are disciplined to get it paid on time and how confident you are.  It's like the job of being an effective real estate Agent.  Just go with a niche that makes you feel confident.  You will succeed eventually if you never quit.  You need a buyers list that have the desire to do what you do. 

There also is what he calls is Reverse Wholesaling where you find buyers and they tell you what to look for and you call them when you find it.  This way you do not have to find a buyer because you know who to call whenever you find a deal.

Good luck to you!

Hello Coleman!  If you are going to invest out of state and keep your traveling expenses down, I would invest in a Turnkey business with a good history unless I knew someone that lives by there and can really help.  Stay away from big cities like Los Angeles, New York, Houston, Dallas, San Francisco, Etc..  Just make sure that the subject property is in an area of population growth, has job growth, amenities, and high demand.

Another option is being able to move near the subject property.  Just do what is common in that area.  Good luck to you!

Hello Kyleigh! If you entity in a state that tends to be lenient, if not already, form where you want and at least keep business separate from all personal transactions. I think a LLC is the best way to go but you might want to discuss that with an Attorney that does that regularly and understands what you are trying to accomplish. Do the minimum paperwork required in that entity to prove it is not a personal ran business by a judge. All legal entities such as proposals and checks should have your entity name that it is a legal business including the type of entity like Inc or LLC.

The same goes with your business checks that are all business transactions.  Do not try to do everything by yourself to try to save you money.  Treat all payments to Attorneys and CPA's are just a part of your normal business expenses.  Look at them as an asset not a liability.

Who the hell am I anyway.  I ran other businesses including my own. I'm 62 years old and I have learned a lot of that the hard way including my own company. Try to be prepared for what might come up including unexpected things.  Good luck to you!

Hello Allen! I think your best bet would be owner financing. They go with your personality and the rapport you present not your credit score. Keep all of your properties in a LLC on each property. That should keep your other properties and your personal assets out of reach. It is normally easier to file a business bankruptcy instead of a personal one. You might need to hire an experienced Attorney and a Tax Consultant. They should be experienced in your field.

do the minimum of paperwork and your businesses and personal accounts completely separate so a judge cannot call it a personal business and hold you personally liable.  You can borrow from one of your existing properties for a down payment or get the Owner to finance you 100% depending on their needs and what you want.  Like doing a "subject to" or a Lease Option.  An agreed price can be paid at the next closing that has a maximum time limit.  Just be creative.

Good luck to you!

Hello Randy!  Never buy a foreclosure without title insurance to protect you.  Any valid liens can come try to get you tp pay.  Even if a title company is employed to do that, they can't find everything.  That is why they offer that insurance.  A foreclosure does not erase liens. You might save some money by trying to make a settlement. Good luck to you!

Hello Wade!  I think that purchasing a place that has added value and either sell it or rent it out for passive income is ideal. When you buy, fix up ,and sell it is treated as ordinary income which has a higher tax rate.  If you do a mortgage/debt loan and pay 30% down you would look better on paper, your investors or buyers would appreciate you more and what you are offering.  There's nothing wrong with debt as long as you get positive cash flow after all expenses are paid plus the debt payment each month.

If you were grown up to be an honest person, you will not like wholesaling because you have to lie, possibly, to the seller about what you are really doing and they might get upset that you are going to make a profit, there's backstabbing, and always evaluate based on two closings just in case.  It's usually better to invest long term and possible appreciation.

Always buy in a growth and demand area.  In the beginning just do what is common in that area.  Have curb appeal.  Look within an hour drive and only do out of town purchases with an experienced and knowledgeable Turnkey company that manages too.  Usually the more units the better because multiple units is less painful than just one on a vacancy.

Good luck to you!

Hello Jeremy!  The market is in your favor now, most likely.  Just sell it and then you can use out of your pocket money to pay additional principle each month to pay off that mortgage early on your residence.  Another thing you could do is see if the current tenant would take your financing on a Lease Option if the will pay rent that covers your debt payment or more and use any spread to pay off your mortgage early.  

Good luck to you!

Hello Colin!  It is determined by all parties on the Deed or some other legal form executed by that places ownership with that property involved.  Not the mortgage.  

Good luck to y'all!

Hello Juan! To purchase a property you need a Purchase Agreement and  Promissory Note and any addendum to be clear on any point you need to be clear at.  Really, it will take the same one to sell and there is financing happening.  Probably, the best place to get all of the documents you need is an experienced Attorney in Real Estate dealings that is working for you, not the other person that is on the other side.  The main alternate would the Agents agreements to use.  Again, they need to be working for you.

Good luck to you!

Hello Ibrahim! The first problem you said was that you would go to a bank for your loan. I would not go there unless I had a good personal contact there that could help. they may have the lowest interest rate but a ton of paperwork and are very strict at underwriting and require 20 % down payment unless you got a FHA loan that require 3.5% loan. I would suggest that you buy a value-add building/site. It sounds like you are talking about offering a Lease Option where you rent for 2 or 3 years and agree on a future price that sells them the house. No, you do not have to pay off the loan before you sell.

You can sell with a loan balance as long as selling your home would pay off your loan balance ideally.   that loan balance would be paid at closed at your home resale closing.  You should also make a little money on the rent if its higher than the debt payment.  It is also usually done with a non-refundable deposit as another way to make money and it is usually collected at the beginning of the lease or at least before your resale closing.  That is negotiable.  You should protect your Lease Option sales price in case you have unexpected appreciation that may change the purchase price.  

You could also entice someone with a partial sales credit with a potion of their lease payment going towards the purchase price.  Adjust the sales price depending how much they will take on the rent credit towards the sales price.  This method will give you 4 times to make money on the same property.  Most of the time they do not purchase and you can do that again.  You might want some kind of maintenance agreement that protects you, like you are not contacted unless the repair estimate is over $500.

 They usually maintain nicer because of the purchase agreement existence.There are many folks who have not qualified by a bank and do not know there's an alternate that will take owner financing.  If you do a Lease Option agreement the lease and the purchase should be 2 contracts.  Good luck to you!