All Forum Posts by: Nikki Harmon

 Pretty sure number two is EXACTLY what happened.  We made a sufficient deal, as I thought I was selling to a cash buyer who had whatever intention they had with the property.   There was definitely NOT enough room to mark it up and still flip it to another investor.  On top of the fact that  I found out that he was not only wholesaling it, but he had other wholesalers listing it at a significantly higher price than his mark up.  I was recently told this is called a "daisy chain".  

Who knows if any of those "partners" came through my property genuinely interested, but not at these significant markups....

 He had a link to his list with my property WITH MY ADDRESS PUBLICLY AVAILABLE on his company facebook. That us how I got a hold of it the first time. 

Also, is there any determining factors in getting on an email list?  I signed up through his website, and had it in my inbox with 24 hours.  This is also how I've gotten a few other lists, no vetting process.   

 He entered into a contract under good faith that he was a cash buyer intending to close on my property himself.  He never actually intended to close.  He paraded strangers through my property, including a phony inspector.  In our first conversation, I had told him I had several other appointments with other interested parties coming to see my house, the following week.  I canceled those appts based on having an offer, from someone who represented themselves as a cash buyer intent on closing on my property.  And while I understand there is an inspection period for him to find my property unacceptable, he never inspected my property.  He told me he couldn't find a buyer, so he couldn't close, once I confronted him about wholesaling my property.  My understanding is that you enter into a contract in good faith, meaning you intend to do what you are stating, which is close.  Sometimes things happen and the contract falls through, and that is not fraudulent.  However, misrepresenting yourself and having no intention of following the contract is definitely a violation of a good faith agreement. 

I spoke with another wholesaler, and he was perfectly honest about his intentions, and what he would need/want from me.  While l can definitely understand the debate of legality, since he would be marketing my property and brokering a sale unlicensed, his honesty about what his intentions were speaks volumes. 

 Well for one, I've come to find out that my property was not only wholesaled at this markup for this guy, but also REWHOLESALED at another markup on top of his.  It was sent out on various lists ar various different price points. Someone told me this is called a daisy chain.  Someone could have viewed my property with a much higher and unreasonable price point in mind, when they might have paid something closer to what I would be willing to negotiate with.  I possibly lost an opportunity for a true cash buyer.

Let's not disregard the fact that this man had various strangers paraded through my house under the guise of being "partners". Considering he mass marketed my property over email to anyone who might have signed up on his site, literally anyone could have called the number to see my house, with no vetting. This is a huge violation of my safety, considering I thought I was letting associates of his, and not strangers he didn't even know personally into my house. 

 I will be. What he did was fraudulent. He did not enter into a contract in good faith.  I just need a moment to sit down and write everything out, in thorough detail, before I speak with anyone. I need to align my thoughts, and with a toddler and a newborn and getting the house ready to go on the market, plus meeting with a couple of legitimate interested parties this weekend, that sit down moment isn't going to come until next week.  

The ARV minus repairs question wasn't in reference to my own property. I was thinking in terms of buying buy and holds in the future with strong cash flow. What you said made about not buying something that needs repairs unless you are getting a substantial discount helped me align my thinking though. Thanks!

Also, to be clear, I wasn't looking for a quick cash sale when I spoke with this guy. It was offered, and who would turn that down versus waiting 30 to 60 days to close?

Also, the house needs about 20k in repairs I think, but 30k would likely put you in the 325k and up range for ARV.

If cash flow is strong, what kind of percentage of ARV should you limit yourself to? I imagine that in a case with really good cash flow, you might consider full ARV minus repairs? Is that completely off base?

 That is very honestly correct.  My original intention however wasn't to sell to an investor.  I was looking for maybe someone looking to fix it up and live in it.  I went into this telling the guy I was listing on Monday at 260k.  I was just researching to see what kind of price/closing these "we buy houses" places offer.  I had a few appts next week from various interested people.  He made an offer to purchase it himself as a cash buyer with a 2 week closing.  We negotiated a price based on us signing immediately and me canceling my other showings.  It was a good deal for us so we took it.  While, we would really appreciate a quick sale, we did not go into it expecting that. 

He shouldn't have made an offer he couldn't follow through on.   

I have a question that I have been researching for a while and haven't come up with any conclusive information. When purchasing a buy and hold, does the 70 percent of ARV minus repairs formula still apply, or should you go buy different calculations?

Also, found out, he was wholesaling it, and he had other wholesalers remarketing it at even higher prices than his.  who knows how many buyers I missed because they were looking at the property with a much higher price in mind.

 Comps in the area for the last six months range from 310k to 350k.  In current condition, I price it between 265k and 275k.  For a quick sale, I am offering it up currently at 245k. 

Once I sell it, I'll post how the deal worked out.