All Forum Posts by: Michelle B.

Jordan Venjohn Are you saying that you have found banks that will loan 80% LTV on an investment property? If so, that is great!

John Thedford I agree that it's a fine line...if you have no intention or ability (which I have found is typically the case) I think it's a problem.... However, I have no knowledge of the legalities involved. Is there a way to legally structure a wholesale deal and fully/honestly educate the seller on your intentions? I think your stance is that regardless of how it's structured, if you are not intending to buy than you are acting as an agent - unlicensed.

John Thedford Thanks for the reply on the equity stripping question....I understand where you are coming from and your stance. I also agree that MOST wholesalers that I have encountered mislead their sellers. Most are not upfront with their intentions and (what really pisses me off) include weasel clauses in their contracts. As an investor that deals directly with homeowners, it angers me. Whether I offer on an MLS property (which isn't very often these days) or an off market deal, my contracts are clean and my EMD is large. I have no contingencies at all, my EMD is typically five figures and I provide a POFs along with my offer. Jay Hinrichs I'm not sure that I agree with / understand your assessment. I understand that people feel that wholesaling is illegal...and I honestly don't have any desire to debate the topic. I just can't grasp someone suing me because I made too much profit from the investment. I'm with you on the type of property purchased. We typically end up buying severely distressed homes. The last one was full of cat urine and feces. The roof was leaking in multiple areas, the ceilings had collapsed, HVAC non functional, plumbing non functional. It wasn't habitable and the owner was still living in the property. She cried at closing, gave us a thank you card and was the first person to see the property upon completion. She literally hugged us 4 times during the walk through. Anyway - thanks for the responses on the equity stripping. I hadn't heard this term before and it just got me thinking. Going to do some additional research. Cheers! Michelle

Jay Hinrichs John Thedford I think the original question posed is absolutely ridiculous - as I stated in an earlier post. And again, I am not a wholesaler nor do I want to be nor have I ever purchased from a wholesaler. I have a question though - how do you respond to the questions regarding equity stripping? What is the difference between doing direct marketing myself, buying it myself and getting a great deal versus a wholesaler doing it? How is it not considered equity stripping if I buy it myself?

Jordan Venjohn I just did a cash out refi on one of my rentals. It's based on the appraisal amount. So - $175k * 70% (or whatever the bank you are working with allows). That puts it at $122k. You owe $114k. So at 70% you have < $10k available...not sure what your goal is. But I wouldn't even bother executing for that little cash. Good luck! Michelle

Nicholas Candaffio This is just my 2 cents.... IF you can find a wholesaler that is worth a damn, then sure, why not purchase from them. However, at least in my market, finding a wholesaler that actually has good deals is as difficult as finding the deal itself. Having said that, my preference is to use direct marketing and source my own deals. Good luck! Michelle

Patsy Waldron Can you elaborate? The attorney information is public record and not difficult to locate. What exactly are you suggesting be done with the atty info?

That's a tough question and dependent on what you are trying to accomplish. My rentals are all long-term plays. I have a well paying W2 job that I am not interested in leaving. All of my rentals are in B+ areas that cash flow a little but not a ton. However, finding properties that cash flow enough to replace my W2 income was never the goal. My partner and I are now moving into flips. We just finished our first flip earlier this month. The property went under contract in 1 day (multiple offers above ask) and will net $49k in profit. I see others in my area that settle for $15-20k in profit on a flip in the same price range. I am very conservative when running numbers - for buy and holds and flips. Our first flip was tough to comp. I assumed an ARV of $125k (low end of range) and $65k in reno costs. Leaving $20k in profit. We pulled the trigger so that we could get a flip under our belt, but I didn't love the margins. We came in right on budget and sold for $155k making nearly $30k more than expected (more than doubled our expectation). If I would have continued to compete on the MLS I would have had no choice but to tighten up my numbers (less conservative, more risk and ultimately lower returns). Otherwise, I am wasting everyone's time making offers, including my own. Michelle

William S. You say "list price" so I assume you are looking at properties on the MLS? I gave up on MLS properties long ago...in my area there are tons of buyers willing to (in my opinion) overpay. This is for both buy and hold and flip properties. Every "good" listing ends up in multiple offers that push the purchase price up so high it's no longer a good deal. If you are willing to settle for an ok deal - then keep looking on the MLS. You will eventually find something. If you are more interested in finding a smoking hot deal then try your hand at direct marketing. Good luck! Michelle

Chris Heeren Also depends on what your goals are. We have 5 rentals. The original plan was to purchase 1 additional per year (I have a well paying W2 job that I am not interested in giving up). However, my last purchase was more difficult than the previous 4. I have been able to offset the income pretty well, but on paper, that wasn't aligning with my goal of growing my portfolio. I have since made an effort to show less expenses and more income. It's a fine line to balance. Good luck! Michelle