All Forum Posts by: Nina Grayson

 Exactamundo!  We offered $7350 AF, which was more than 10%.  We walked away.  

@Will Barnard. So True. While Wholesaling can be the fastest way to earn an income in REI, there are Wholesalers who give it a bad name. In the last few days I was back-and-forth on a deal, where we even increased our offer to get the property. When it was revealed to us the Wholesaler was asking for a $32k AF on a $212k pp, I was disgusted. 15% AF Fee? That's crazy.

@Graham Nash 

Hi Graham, 

It's no longer in the works. I continued to reach out to P1, but she did not want the proposed scenario. I told her in our last conversation that since she's benefiting from living in the property, her share of the return on investment would be lower than others. I think she just want's passive investors to give her enough to move to a location she wants to live in ($2 mil and up) and not do an LLC. A bit greedy, but she's new.

I have no plans to do Owner Occupy partnerships - there's too much risk if you want to sell your share and they can't or if they don't want to move.  

@Walter Roby jr - Hey Walter, That's exactly what I wanted to do, but the Reverse Wholesaler brought in the Cash Buyer and she only wants to contract with her LLC as principal. She's new and is not very trusting. I'm not chasing after her for buyers - there are plenty of buyers in the world who want good deals and an agent (me) who is worth their salt in honesty, transparency, and the work they say they'll put into partnering with them.

Thanks for the feedback/advice!

Win-Win,

Nina

Love. Life. Property.  

Hi @Julie Dike, 

There is a glossary here on BP, but it only has a few terms.  Here's the link:  BP REI Glossary. Members can also email BP to have a term added, which I think is a fast and comprehensive way to build the BP REI Glossary!

For a more comprehensive list of real estate terms in general, you can go here: Investopedia Real Estate Terms

Keep in mind, the more you read on BP, watch BP Podcasts, Instructional Videos, read the BP published books, and attend REI Association and Club meetings in your area, you will learn the lingo.

I recommend when you come across a term you don't know, search for it on BP.  Most times, Blog Posts that discuss a topic will include a definition of that topic in the introduction.  

Thanks @Walter Roby jr

That's pretty much how we planned to do the deal.  

The Wholesaler already has a cash buyer but needed properties. The Wholesaler looked to me to find those properties and said they would add my fee to their fee.  However, as a licensed agent, I legally can only do the deal as myself, an individual, not acting as an agent to anyone; self-representing.  

So, if I am finding the property for their cash buyer per their request, I would be acting as an agent for that cash buyer.  Thus, I would have to have a Buyer's Agency Agreement.  

However, if I am self-representing as a Wholesaler, I would have to be listed on the P&S agreement as the Wholesale buyer with the other Wholesaler. Then put my skin in the game by finding the property. They bring it to their skin in the game, the cash buyer, and its assigned to the cash buyer with a fee that represents what they originally would have charged without me in the deal.

So hypothetically say their original fee is $60k, add my fee, a % of their $60k, say 20%.  The total wholesale fee to the cash buyer would be $72k.  I would get $12k for finding a property and they would get $60k.  

Bottom line, the legal way for myself, a CA licensee, to Wholesale is to self-represent as a Wholesale Buyer and provide disclosure of my license.  

@Charlie MacPherson and @Wayne Brooks

Thank you both.  

Yes, Charlie a contract is a given. 

I was attempting to discern if the agent must be a buyer on the contract and must also have a contract, as a buyer, with the reverse wholesaler.  Based on my review of CA Agency Law, that is how this must be done.  And I must also provide a disclosure of self-represented agent licensee and financial interest.  All three of these protect my license and ensure I receive a portion of the assignment fee.  

If I am not the buyer then I am acting as an agent under express or implied agreement by the wholesaler to find properties for their cash buyer.  Effectively, I would be acting as the buyer's agent, which requires a written agreement, and my fee can only be a commission.   

So, the contractual solution?  

I partner with the wholesaler in a Wholesaler and Wholesaler Partnership contract as buyers on a purchase and sale contract, and which describes the terms of the agreement and payment.

I provide Real Estate Salesperson Licensee and Financial Interest Disclosure to the seller.

Both myself and the reverse wholesaler are buyer's on the contract and we both have the right to assign.

If anyone has more thoughts on this, please chime-in. . .

Nina

BP Community, 

Do any agents in CA receive a % of an assignment fee from wholesalers for finding properties, and if so, how do you have it written in the/a contract?  Are you also a buyer on the contract?

As an agent, I have a fiduciary responsibility to my buyer or seller in the purchase and sale of a property.  As a wholesaler, I am a self-represented investor, and as long as I disclose in my cover letter to the seller that I am a licensed agent, self-representing, that I have a financial interest in the transaction, and that I am not representing anyone else in the transaction, I can do wholesale contracts.  

I met a reverse wholesaler (has a cash buyer and is looking for properties) who asked me to work with her in finding properties and she would pay me a % of her assignment fee.  

In order for me to be paid a % of the assignment fee, I (or my LLC) would have to be one of the buyer's in the contract. Otherwise, receiving a property/seller finder's fee on a contract other than a commission is not allowed as an agent.

Hi @Frank Perkins, 

I've been educating, educating, educating myself on all things Wholesaling to be sure I am legally, accurately, and effectively engaging in Wholesaling for myself and my Investors. With that said, I have asked my brokerage and C.A.R. Legal what are the implications for Realtors and real estate salesperson in writing and assigning Wholesale P&S Contracts.

Here are my questions and answers from C.A.R.:

Question 1: What am I required to disclose as a Realtor and real estate sales person in writing and assigning Wholesale P&S Contracts?

Answer: You must provide the NOD and include the following:

1. I am a licensed real estate salesperson in the State of California and a Realtor with the National Association of Realtors.
2. I have a financial interest in this transaction.
3. I am representing myself in this transaction.
4. I am not representing you or anyone else in this transaction

You can also include this in your cover letter to the Buyer.  

In addition, anytime during the verbal interaction with the Seller/property owner, if they ask you for real estate advice or guidance, you can tell them, in a nice way, that since your role is not as a real estate salesperson or Realtor in this transaction or as representation to anyone but yourself in this transaction,  you want them to get the best advice from someone representing their interest and recommend they speak with their attorney or real estate salesperson.  

And you can tell them your intentions, as part of the verbal offer, your contingencies are an inspection and appraisal so you can determine the actual value of the property. But you are not acting as a real estate sales person in the transaction and this has been disclosed, so you analyzing repairs and knowing the estimated ARV and what it can list for, is as a Buyer not as a real estate salesperson.

Question 2: Can I use C.A.R. RPA, AOAA, and NOD forms as a self-representing Buyer and can I remove my brokerage since I am not acting as a Realtor or real estate salesperson?

Answer: You can definitely use the C.A.R. forms, but you will need to check with your brokerage on their policy re Realtors and real estate salespersons writing and assigning Wholesale P&S Contracts. Some brokerages might exclude any E&O protection for you doing outside-of-brokerage deals. Some brokerages might not have any exclusions, because by the nature and consideration of your first disclosure as to your role and interest, which is in writing and agreed to by the Seller, the E&O would not be available to you. See if your brokerage has an agreement for this, most likely they do cause as you know as a real estate salesperson, you should get everything in writing.

Hope this helps,

NG

@MIchael G. 

Hi Mike, I am CA Realtor, not an attorney, and I do not know much about NJ Real Estate Law or Landlord-Tenant Laws. I am not providing any legal advice, but  I do feel for your situation and felt I could give you some direction.  

You are in a Tenant at Sufferance situation:

A tenant at sufferance is the situation when a tenant of real estate continues to occupy the premises without the landlord's consent after the original lease or rental agreement between the landlord and the tenant has expired. A tenant in this situation is also referred to as a holdover tenant.

As others have suggested, definitely hire a Real Estate Attorney.  They will know NJ Eviction Law.  You can also read about it here, http://www.state.nj.us/dca/divisions/codes/publica....  You certainly have grounds for eviction, even if the squatter is not the Lessee (Tenant).  You can find out more about the NJ grounds for eviction here, http://www.state.nj.us/dca/divisions/codes/publica....  

Attorney's initial consulting fees are worth it, in my opinion, and you can always negotiate to have those deducted from their retainer fee.

Listen to Rick Stein above!  

NG