All Forum Posts by: James Hamling

Jarcelyn Dorsey
I am not a wholesaler, so I have no experience looking for cash buyers, but I thought of something you could do, because I know myself.
As a cash buyer, I don't use just any old closing company. I use a investor friendly closing co., and there are not many who are skilled at working with investor structured closings, not good ones. And I also use a real estate attourney to execute my redemptions.
I imagine you could reverse engineer the process, think like a cash buyer, make calls to title companies as if you are a cash buyer to qualify them. In that process a good one will say "oh yeah, we process for many cash buyers". You get that, call back a day or two later, and network to either get there info or forward your info. And throw a bone, promise to process all sales thru em or something.
For me, other then the realtor blood hound, I'd have to say that would be the shortest route.
Hope it helps

i appolagise if I mislead making rentals sound risk free. to the point, NOTHING is risk free, NOTHING. Driving to the grocery store has risk, breathing has risk, LIVING IS RISKY.

Rentals have risk. In my opinion and analysis, operated well, rentals have the greatest returns, with the least work, and most "outs", and if bought and managed right, least risk.

I am shocked how many people are quick to argue my point, but inject little to no counter point, or data.

Yes rentals have a element of risk.

Myself, personally, I am rental focused now. I still do flips, and was primarily a flip investor. Todays market, I am not earning the R.O.I. I can obtaine with rentals.

With rentals, I can use financing to suppliment my cash, so where if i hard money lent 100K I'd be in 1 property, where for that same money I may be cash flowing in 4 or 5 rentals. PLUS I have control.

If I have 20K in a rental, and it cash flows 10K, what is my annual R.O.I.?

If I have 100K in a property and net 20K pre tax in 3mnths what is my R.O.I.?

Now factor in taxes, and watch those R.O.I. vastly change.

I funnel all my flip returns into rentals, because of taxes.

Re: Phillip Gainey andd your nightmare P.M. story, I am very sorry to hear your troubles. Although I need to pint out, your issues are pretty clear cut as a P.M. issue, not an investment issue.
If doing a flip, with a crappy contractor like that P.M., who over charges, under performs, you'd loose money there.
It is not an investment issue as it is a logistics problem. Fire that crappy P.M. stat, get yourself a hero not a zero. With a P.M. like that I could give you a home for $100.00 and it would still loose money.

Re: Chris Clothier and hand off as a hard money investor;

Being a hard money lender is far from hands off, or risk free. 1) you have lots of cash betting on a other persons performance, which you have little to no control over
2) you have to really do your due dilligence, what if it is not a clear title? Lawsuites? the investor burns the property down on accident?
3) It requires a lot of cash up front, out of pocket.

And someone mentioned stocks, Lol, do I really need 2go there? I was a guy in stocks, WAS. I have rode 3 bust cycles, and lost far far more in stocks and bonds then anywhere else in my life ever. PLUS a 5% return is NOT a 5% return, what about inflation? A inflation rate of 4% makes a 5% return a 1% return. No minus trade fees, servicing fees, TAXES! My R.E. is a deduction.

I will defer to my original advice: #1, evaluate your resources, knowledge, risk tollerence, and time. #2 research your resources applications #3 move forward from there.

And yes, rentals/ holding IS a slow wealth build program, as opposed to what? "get rich quick"?. I don't watch late night television anymore, I am too busy getting wealthy slowly, steadily, reliably.

In client comparison, my largest client holds just over 4,700 units, all rental. I WISH I had his units, trust me, they don't loose money. Can you name me one, just one major property rental company loosing money?
Again, to blanket label rentals as poor or bad investments is just as foolish as the countless people who tell me it is a bad R.E. market and theres no money in R.E.I., it is an misinformed, bias, remark, with countless proof to the contrary.

But hey, by all means, please feel free to stay out of the market. I would LOVE to be the sole provider of the millions upon million of renters. OMG, I would have to build a vault like Scrooge McDuck and swim in my millions, no BILLIONS, lol.

Come on people, theres oppertunity left and right, changing state 2 state, market 2 market. All of us active in it know this. There is no 1 size fits all.

I somewhat agree, there IS risk. Can you tell me where in R.E.I. there is not risk?
Flips: the market can turn, you have lots of money tied into the property, after sale you can get sued and forced to put more work into it

Buying REO, you can get sued by the previous owner that they were victum of predatory lending, and they are fighting to retain the property post foreclosure. OR it looks good, and once into it, surprise surprise, there is massive mold inside some walls that inspection didn't show and banks sell "as-is" with no way to go back.

All aspects hold risk, it is a question of how much risk and what type. I respect that your personal feelings are rentals are high risk. I could fill a Raddison with investors who will argue to the ends of the earth that rentals are the safest and they would never touch anything else.

I am indifferent. I evaluate each situation on it's individual merits. I will say, generally speaking, rentals are the strongest right now.
1) lending for home purchase has tightened greatly, greater difficulty qualifying to purchase a home = more renters.
2) market average pricing is at a near dead = price with rental rates. meaning far easier to cash flow WITH financing
3) many markets are seeing the smallest vacency rate in decades. In my market, vacency rate is <3%, market average has been 10%. That means huge demand, and I can be ultra selective.
4) A rental is viewed and taxed as a business, ie. a person can deduct all those managment costs, depritiation, and so on, creating non-taxed profits, as well as mortgage interest being tax deductable, so numerious tax advantages, where flips have capital gains
5) With a full managment company, you do NOTHING, they do 100%, from showings, lease's, too evictions, cleanups, and so on. My m,anagment co. gives eviction insurance, tennant warrenty. You are incorrect, a investor does NOT need to be involved a drop more then desired.
6) Rents can be raised, especially in a high demand market
7) Local, State and Fed agencies have programs to provide funds FOR rental investors, I have never found 1 cent for any other R.E>I. system.

I just want to point out, rentals do have many up sides. To root out rentals a generically being bad, is like saying the stock market is great because Microsoft stock went up.

Some markets and areas are NOT good rental areas, as with all R.E.I. one must KNOW the market area.

For my money, I am pressing my holding booking bigger and bigger. And I personally never deal with prop. managment issues, EVER. It is not effective use of my time. And myself, I have only profited. We had an add to rent a 2bd 1bth unit recently, we recieved 100 e-mails in 24 hrs, it was insane. I could require blood testing and physicals in my rental ap's and I think i would still be flooded, lol.

I am able to cherry pick who i want to rent to.

I respect your opinion that you don't like rentals. My numbers, and many many other investors, aside from emotion state holding is a home run right now.

EXACTLY and SUPERB points!
All who are newer save that whole post, print it out, frame it and put it on your desk because without due diligence C.I.A. style a good investment can turn into complete financial ruin in a snap!

Bank accounts are safe and passive, and 1.1%.

Great point on C.Y.A.! And if it looks good but the gut is giving weird signals, DIG DEEPER!

I just had one too good to be true. Hedge fund, selling a 500K property for 120K. Only needed updates. They required all cash sell, and fast closing, and they said that was why the steep discount because most don't truly have those capabilaties.
All my searching was clean, clear title, property was good, it was just too good to be true, it made no sense.
So, on a hunch, I called the city and spoke to the Mayor (was a rural small high end town).
Turns out it was a split lot, where the property was fine, BUT, the prev. owner still owned the property next to the home which had the driveway running thru it, and was refusing access, to the extent of building a steel gate. And the land on each side to cut a new drive, was registered wild life preserve and wet land water shed, and would require major polatics.
Dig deep. To make that work, I would have had to by other land, convert it to water shed land per Gov. regs, just a huge mess. Would have lost a lot of money.

There is 1 passive investment possability, if your willing to waite a few weeks. Turn key rental investments

My partners and I are opening a new division where we use our banking interests to gain properties, fully rehab them, install a top prop. managment co. we have ties with, install a renter, and we resell them as a full turn key rental investment.
All you (the investor buyer) needs to do, is 1)wake up and breath 2)watch your bank account recieve rent payments 3)write and pay your bills like tax's and payments. thats it. A literal hand feed profiting investment, with all the work done.
We are also working a deal to offer seller financing, so you would need about 10% purchase price out of pocket, which is offset by the deposits you recieve the day you purchase (1st mnth, last mnth, security)

Why are we making this offering? Because EVERYONE wins. We make money on rehab, the investor makes money on renting, managment company makes money on managing. The only looser is the bank, who sells to us at a huge discount....... but....... we ALL paid them already via bail out bucks so...... we all win.

This is truly the ONLY low risk, low work, low investment, easy, verefied, cash producing investment in R.E.I. I know of. If anyone knows difernt, please correct me. Seriously, I have looked and don't know of any legit person doing this.

And yes, i know of other "turn key" systems, everyone I have checked has been a scam of some sort. Requires escrow to bid, we don't, has fees, we don't, has cash flow based upon projections, we have it producing before sale, and so on. We just build em, rent em, have em cash flow producing and 100% hands off, and sell em.
We look at each other every day asking "how could we be the only ones?" but I am reminded, someone has always been first at anything, maybe were just the first at this here.

And yes, we hold some. I could hold all and be greedy, but I figure I can split it 50/50, hold and be greedy on half, and share the wealth on half and earn. I am an open book guy, I make profits on my rehab. If you look into investment JV's like this, thats what you want, an open book honest guy who says "hey, you will make money and so do I, I make this much here doing XYZ".
People who hide things have things to hide, and I have yet to have something good and wonderful hidden from me.

Thanks Dionte G., I appreciate the compliment.

I will try to touch on a lot here to answer all I can quick:

Hard money lenders:
I use em, know em very well. To find an expensive one is easy, they have web sites you can find thru google, but they will "fee" you to death. Best way i have found to find a good one, network network network. Everyone is keeping them secret, because they are a literal gold mine.
With a Hard Money lender, they will be interviewing you, not you them. They will want to know why "you" will be a good investment, and how you can proove it. No experience and no rock solid plan = no money. My #1 hard money guy lends me with $0.00 fees, not 1 cent other then points and A.P.R. on the money. It is so rare. I meet him thru a friend investor, who had to introduce me because we were J.V.'ing on a project, lol. I had a track record as a contractor for investors, so I had the plan, the proof, so I got the money.

Start with does not require your money, JV with someone who has money or can get it. Buy on seller financing. Use equity from something you already own. On and on and on.....

See, being a real estate investor has little to do with property, and everything to do with "deal engineering". A real estate investor is full time problem solving super star. Put 10 of us in a room for 20 minutes and we would solve the U.S. economy, world hunger, and probably cure 1/2 of all cancer, lol. We are problem junkies, we love solving the unsolvable and earning great returns doing it.
If that is not you, it is ok, embrace it, and find what you ARE and what way to best invest as that. Hard Money lenders are NOT problem junkies, they HATE problems, lol, and they make very good returns. 1st take stock of who you are, what your are willing to become, then your resources, battle plan, and take action. Recognize, analyize, plan, execute.

As far as risk mitigation goes, more risk = more profit, less risk = less profit. That is a general rule, and there are exceptions, but the exceptions are rare to non existent, and always complicated because it is a solution some problem junkie devised, like redemptions. Redemptions are awesome, but for me to explaine how to do one, lmao, would be a novel.

I am a cash buyer, and I tell ya what, I WISH I had wholesalers seeking me out.

I would say easiest way to find out, make friends with a realtor, and ask them to look up who bought it at XYZ address, or the agent. Will take a realtor 5 minutes, and save you the leg work. By em lunch for it or something.

And hey, you ever wanna wholesale in MN, I literally have cash burning a hole in my pocket, I literally have way way too much money sitting.

Ok, I think I can respond to many by responding to this one:

While I agree with some of your points (and disagree with other points you made), the fact is that there is a lot of personal preference, personal circumstance and personal business methodology involved in deciding how to get your rehabs done.

Investors are on site day 1 when we start, and back the day were done and never need 1 second of time in between.
This is the part of your post that makes it clear that you are more a contractor than a successful investor.

I don't know of any successful investor who would trust a contractor (especially an unknown one) to complete a job without being on-site to at least verify that things are getting done, getting done properly and getting done on-budget.

1 Ok. I said the investor NEVER NEEDS to be onsight, not the investor CAN'T be onsight, lol. Sure, I have had them come out in the past, all the time, a-ok, never said they can't or shouldn't. I was responding in the context of the previous conversations of a investor doing all the running around, delivering materials and so on.

2 I actual am known for design and remodeling in my home state, I actually won an award last year for the #1 design of the year. Am I bragging a little.... hell yes I am, do you know how hard that project was, lol.

3 Ok, pay close attention. A "contractor" who is wearing the tool belt, doing the work, 99.9% odds that he does not have "major" discounting power BECAUSE HIS TIME IS SPENT DOING THE INSTALLS. Think about it for a minute, it is common sense.
*!*THE EXCEPTION*!* SUB-contractors, the actual trades person, may be the installer and have a really good discounting from years and years in that one exact nich. Example, carpet guys. The best carpet guys almost always warehouse there own pad, that they buy in bulk from the textile mills in the south.

A "good" contractor knows these things, and draws on them, and brings them to bear, the contractor discounts AND the sub discounts.

The exact issue being discussed was contractors, not hiring sub's. If as an investor you want to also be the contractor, all the more power to ya, that's what I do. But for forum sake, please understand what is a contractor, what is a sub, and argue from there. Most of these comments are people acting as the contractor arguing comparing sub's to contractors. I expect a sub to do the work, there a sub. A contractor will not have the time to install, even if they want to.

About T&M billing. that is the way every national builder has requested and demanded it in every contract or bidding I have ever done, seen, or heard of. I personally don't like it, but they love it it is a very legitimate billing/ bidding format.

First off, for simple clarity, please read the exact words I wrote because I was speaking on GENERAL CONTRACTORS, not SUB contractors. I would expect anyone claiming to be a contractor of 30yrs to know the difference. Sub-contractors are the trades people, and 90% of the time a small 1 or 2 guy company. Although I do sub to some larger companies, although all have hourly employees.
Point is, a CONTRACTOR and a SUB-contractor are 2 totally different things. And that is the place I see most investors messing up in, the investor acts as the contractor, trying to hire subs, order materials, plan and design a project, and direct work. problem with that is if they are not very skilled in construction, they may miss a lot, not build to code, and have many fall out issues. As well as time spent on all of these facets, material discounts, labor discounts, so on and so fourth. I have witnessed many sub-contractors hired being called a contractor.

Aaron McGinnis, thanks for your question and I would be happy to answer. As far as HD, my discount came about thru sheer purchase power, and frustraction over exactly what you said. i myself was going thru supply houses, and was building 4 apartment complexs at once (scheduling crunch) and i ran into an issue where 3 of my supply houses ran short on materials I had already ordered, and I got held up due to there inability to keep material flow. I am not one to waite or whine, so I went the step up, to the manufacturers. I found it was a lot easier then I had thought. There are multipule different structures as far as logistics go but they all equal significant discounting, and most importantly, no supply lag if I hit a scheduling crunch again where big builds stack up on each other.
At HD, I side stepped the store and went to corporate. Not everyone can do this, I had annual purchases in the mid 6 figures. And I also pressed there own supply on granite once, lol. I bought 4 containers of granite from the manufacturer in China, which happened to be H.D. supplier. (you can find China manufacturers online with mat. listing thru abudabie).

If you want greatest discounting you can negotiate locially, get distributor licensing from manufacturers (I am a licensed dist. for many top brands, there for I am the supply yard in essence) purchase manufacturer direct from over seas, or hire someone who has these capabilaties.

And for any who feel a desire to attack my help, feel free, I am used to it and it does not bother me, I do not need to brag, my cradentials do the speaking for me. I have built developments for national builders, commercial residential developments and multi phasic projects, and been associated with high profile builds, even some featured on television. I know my stuff.

As an investor, if you keep in mind the difference between contractor vs sub-contractor, and know there are contractors with manu. direct, and import capabilaties, just keep looking. There is very little new con happening, so as an investor you offer oppertunity for volume.