All Forum Posts by: Michael Lauther

Good Morning David, your experience tells me that I am not over reacting. If I continue on with this I will only work with the owner of record. I will post the outcome.

Thanks for the encouragement Brooks, Lashing out is never a problem for me I'm used to it, after all I am a Married guy.

Rich, you are right building my own home wasn't rocket science but as a financial guy not a builder it consumed 2 years of my time. I love the home but it was not a great investment for me. Having said that, I would be interested in following your progress.

Its hard to separate real estate investing from construction. One way or another it has impact on our investments.

Dan: thanks for the advice.
I have no problem taking the place of the wholesaler who has negotiated a contract. should't a copy of the contract that I am assuming be disclosed to me. Sure, I would then know that the wholesaler is making a profit and exactly how much, but that would not by itself keep me from following through.

I have never done business this way but I am willing to learn.

Kurt : thank you for your practical suggestion on EM.
Mike and Nathan: I understand that wholesalers are entitled to earn any profit they can and it is not necessary that I like it. but when multiple parties are claiming to represent the owner one of which was totally unknown to the owner, and advertised the property on zillow as if he represented the owner I become concerned.

I will admit that the confusion surrounding this opportunity has caused me to rethink my evaluation of this property.

And Curt, you are correct in that the wholesaler is in charge of the transaction, but when trust issues arise it may be better to walk away and go on to the next deal.

Thank you all for your thoughts:
Jeff, I responded to an add on zillow and I was not privy to any contract other than the word of the wholesaler that he had equitable title.When I inquired he sent an agreement stipulating that I was obligated I pay a fee on any property bought from a particular party.(this party turned out not to be the owner of record of the property I wanted)

Since I buy and have offers on several properties in this area I refused to sign such a limiting agreement. It turns out the party who was billed as the owner was in fact another wholesaler who had a contract to purchase or in some way control the property in question. This sent up red flags for me so I located the owner through a property search and found he in fact is in some arrangement with the 2nd wholesaler.

I will now attempt to deal directly with the owner of record and negotiate a deal that would allow me to pay directly to him and he could compensate the Wholesaler as his agreement with them.
My primary concern is since the second wholesaler wanted to do a double close after receiving a $5,000 earnest money deposit in his name, there was no simple way to make sure I would get the property other than to put that money in escrow with my title company, otherwise if the recorded owner reneged It could be hard to recoup my deposit.
I would agree to take an assignment of the contract but no contract was offered.

what is the normal arrangement when dealing with a wholesaler?

[b]I have made an offer on a property through a wholesaler. Is there any reason that we can't just close through the title company with the current owner and have the wholesaler paid from the owners proceeds. I would feel more comfortable if the contract for sale were with the owner and not the wholesaler who does not own the property at this time. Wholesaler says he has Equitable title but I have no evidence of this. I have no trouble with the fee which looks to be around $5000 on a property that will sell for $23000 because I believe the property is worth what I am paying. Also asking for $5,000 earnest money. this seems excessive. I have never paid more than $1,000.

I would appreciate any thoughts on this issue.

Dayton OH, zip 45403, one month rent 550 insurance 450 yr taxes 1050 year market value around 28k assessed at around 40k.

Hampton Bays,NY zip 11946 4000 sq ft propery one month rent 3,000, taxes 11,000 insurance 3900
market value around 850,000 assessed 850,000

I am currently investing in Dayton Ohio. you can buy Rehabbed rental property in workable neighborhoods and can be all in for 2 or 3 bedroom single family 800 square foot properties that sell for 25k to 30k and rent for $550 - $625. The properties cash flow well but it is not for the faint of heart. These are neighborhoods full of good people dealing with hard times. It is workable if you have good contacts near the neighborhood. If you work hard getting and keeping good tenants the return can be very good but don't think you will flip these properties any time soon. If your business plan is to flip you need to acquire properties in need of repair on decent streets which can be done for under $10k to 15K and put 7k- 10k rehab and then put them on the market for an investor like myself looking to buy and hold. End investor could get 15% cash on cash return which is attractive to many self directed IRA holders.

Sherry, I am a buy and hold investor active in Dayton OH and live in NY. To consider any property you should have at least one reliable contact in the area to take pictures at the very least. next I would need a handy man, a contractor and a realtor. The first thing I would do if you take possession of this property, is to get some good pictures inside and out. next get a contractor to walk through and get some idea of what needs to be done and some preliminary cost. to do this you will need to get the electric and water turner on. you will need a plumber and electrician to be available for this. You may find that you no longer have copper pipes and wires, this will complicate matters a bit. i have had this happen several times, it helps to know this before you bid on the property. Depending on the neighborhood, the condition of the properties in the specific area and the rental income you could expect you may still have a workable property for a buy and hold investor like myself. Unfortunately I do not have the necessary contacts in Toledo to make it workable for me but feel free to contact me if you would like to benefit from my experience in Dayton.