All Forum Posts by: Mike Schorah

Let say you contracted an entire development. You put it under contract.

You have 6 months to do your due diligence. You found a cash buyer out of a fancy city.

You let the guy woo you. He shows up in a Ferrari, takes you on an amazing boat ride. This cash buyer is flashing a massive amount of money. He puts down $100,000 escrow deposit. You think the deal was done. You’re going to make about $400,000 off the deal.

You find out the buyer is not what he represented. It was a rented car. It was a friend of a friend’s boat. It wasn’t his multimillion dollar mansion.

When he doesn’t perform on the contract, you find out the buyer got all this money from an illegal trade. The last time you meet with the buyer, he takes all the paperwork without you knowing about it. The buyer puts the property in a trust.

You find out the buyer’s attorneys owned this property and they threaten you for non-performance and they sue you. You’re sitting there with no paperwork, no alibi, no defense. You have an unscrupulous businessman and you’re honestly concerned with your safety.

What would you do? How much do you think it would cost you to get out of the deal?

Let's say a realtor drove the seller to the closing just to bust you as a wholesaler. Let's say the realtor highlights the assignment fee on the HUD and now your $40,000 check isn't there. And now the realtor has plans to sell your deal on the MLS.

Would you fund the deal with a hard money lender or private lender? Would you give your title company a heads up?

As you pointed out, the nature of the work involves dealing with folks at the worst times in their lives. I actually enjoy that aspect of it. There’s no other job that I’ve had where I noticed I can have such an effect on people’s lives.

Last summer when I went to a driving for dollars lead appointment that ended up actually being a pre-foreclosure, I realized that the work would be meaningful. I met with a wife and husband. The wife was in tears and I felt bad for her and wanted to help. That’s what I learned to do with pre-foreclosures. I ended up finding out that many people in foreclosure just don’t know what to do. So I go through their options and help them work it out. Of course, the main go-to is getting a loan modification. But if they’re not working or if they’re behind on their taxes, they don’t qualify. So I ask them if they ever thought about listing it with a real estate agent before I even go into the option of me putting it under contract.

Also, my first deal was a probate. The vacant home of the seller’s mother and father held sentimental value for the seller. It gave me purpose in helping him get the closure that he needed to move on. Although he will never forget his parents, there has to come a time when it just doesn’t make sense to keep letting something with value go to waste.

I definitely agree that a challenge can be appealing. I’ve always enjoyed a challenge as long as it is reasonable. I spent 3 years studying to be a software engineer. It was an extreme challenge for me. I didn’t have the talent for it, but I still enjoyed that aspect nonetheless. I’ve always enjoyed things that I thought I could possibly accomplish but were very difficult. I’m very grateful for that experience because now I know the nitty gritty of computers and I’ve picked up computer systems very quickly in different roles I’ve held for different companies.

I disagree with what you’re saying about earning more tending bar on the weekends. Do you know how much bartenders get paid where I live?? Not everyone lives in Florida or Denver, Colorado or some other hot spot.

And I also disagree with house hacking. I’ve tried it before and it made me extremely miserable. It’s difficult getting a significant other on board with the idea of strangers living inside your house. Maybe it works for people that want to remain single and don’t mind their privacy being invaded, but not for me.

5 years ago, you could score a pretty big house hack in my area. But with mortgage payments ballooning and the fact that room rental rates haven’t gone up in my area, it’s a negative cash flow disaster waiting to happen. 

And the days of a husband who is married with children and lives 1-3 hours away and needs a room due to a promotion or job loss are long gone. People are scared to death to relocate now and/or can't afford a room due to inflation (even with a promotion) and/or don't need to relocate for a job due to a strong job market and/or are working remotely. So those roommates you used to have who were never there on weekends and rarely there on weekdays are long gone. The only people looking for rooms right now are people that you would call into question as to why they can't afford an apartment. Times have changed.

I don’t want to become a millionaire. I do want financial freedom. What else appeals to me about wholesaling? The ability to work from anywhere. The ability to schedule my own hours. The ability to not fear my car breaking down. Growth, as Tony Robbins says, is one of the biggest human needs and is a huge one in my book. I’m growing constantly on my wholesaling journey even though I haven’t cashed a check in the last 8 months.

I’ve made a ton of mistakes and I’m learning from it. Tony Robbins says that if something isn’t working, then you try something else. And you keep trying things until you figure it out. My strategy and what I know now compared to a year ago is dramatically different. And I’m not going to quit until I figure it out or a significant amount of time goes by without making progress. Tony Robbins mentions how Albert Einstein, Alexander Graham Bell, Martin Luther King Jr., Donald Trump, the Founding Fathers, etc etc etc operated without references. What they had attempted to do has never been accomplished before. That’s way different from my expectations. As long as I see other people doing it, I’m going to keep trying to do it. Why? Because I keep getting better and keep learning more.

From what I’ve noticed, 80% of people that I’ve met who have tried this business gave up within the first 3 months. So my question is: How do I go from the top 20% that have only done one deal to the top 5% that are consistently doing deals?

I read somewhere that the average part time wholesaler is making $40k/year. Are you really telling me that you can make $40k your first year house hacking? Even if that’s the case, having strangers living in my house is extremely unappealing especially given the low room rental rates in my area and the high mortgage rates (if I was going to make a business out of it and expand it).

 I thought probates were double to triple the profit as a regular transaction, easier to get ahold of and easier to work with… 

…Compared to, say, pre-foreclosures where they want every dime possible, you have to knock on their door to get ahold of them, and are usually very dramatic.

EDIT: How do you do 2,000 probates in 40 years? That’s amazing!

I hear gurus say to never stoop to filing a FOIA request, but just how bad is it? How angry does it make court personnel?

I just started my journey of pulling government lists about 3 months ago. I figured I’d start with pre-foreclosure since I hear it’s the easiest to get. I’m surrounded by 4 states.

One state is super easy to get the pre-foreclosure list. You don’t even have to call. It’s right on the website for free.

Another state is somewhat of a headache. You have to pay for the lists in certain counties.

In one state, I hear it’s illegal to market to pre-foreclosures.

The 4th and final state has been a grueling escapade. The courthouses hold a strict privacy policy. And it is one of the top 5 most tenant-friendly states in the nation. After a half dozen emails and a half dozen phone calls, I finally got wind that the only way to get the information is to file a FOIA request.

How bad is it to file a FOIA request? Is there anything I need to watch out for so it’s done legally? Does it take a long time rendering the information useless by the time I get to it?

Unless you were convicted of a felony or don’t meet any of the other requirements lolol 

Right now, it looks super easy that once you have a deal and close on it.. just list it on the MLS for top dollar.

But if it was 2010, junk on the MLS wasn't flying off the shelves. So in that case, would you pretty much have to flip it or wholeSale it?

Why can’t I wholesale probates all across the country?

Or does it take you 4-5-6 touches?

Beyond all the questions you ask, how important is all the cute stuff that makes sellers go “awe”?

And cheering for a baseball team you know nothing about?

And by “cute stuff” I mean saying things like:

- “I’ll do whatever it takes to help you sell your house even if I don’t buy it”

- “It doesn’t matter to me what your decision is. If you’re interested in selling, that’s great. If you’re not interested in selling, that’s great, too. Either way we can walk away as friends.”

- “I’m sure you get a ton of calls. I hate bothering you, but…”

- “I haven’t been able to get ahold of you. I’m assuming you’re busy or not interested. Let me know either way so I could either stop calling or stop calling so much.”

- “I feel bad. I’m like, ‘he probably hates me as much as I call.”

- “The price is too high for me. I don’t think I’m going to be your buyer on this one.”

- “If you’re not interested in selling, does it make sense to stay in touch?”

- “Do I just irritate you? Is that the problem? Is it my voice? A lot of people tell me my voice is weird.”

- “Listen. Did your team lose this week?”

- “I was just thinking about you. I just want to make sure everything is ok. You got that leak in that roof. How is everything working out with the house?”

- “I get it. I got kids running all around my house. 9 times out of 10, it’s a train wreck. I’m not there to judge you. I’m there to help you solve your problem. If you clean it or not, honestly it’s not going to make a difference. And honestly, I’m not here to judge you.”

- “Hey, Listen. I’ve got some information on houses in your market. I think it might help you.”

- “ I might be able to offer you more than you’re even thinking. Just give me a shot. Let me look at it.”

- “Look. I’ll come out and look at it. Regardless of if you want me to buy your house or not, I’ll help you get the house sold. I promise you.”

- “We just need to get you a realtor. Let me bring this person in for ya.

Stuff like that