All Forum Posts by: Randy Thomason

Caution is the best words I can say.  I travel Asia and my wife is Vietnamese.  Laws in Asia are quite different than you are used to and the closing/titling of properties will blow your mind or keep you awake at nights.  In all the Asian countries there are probably more scams than legit companies.  We own property there because my wife is knowledgeable since she worked in RE investments for many years.  Bribery of gov officials can get deeds changed  sometimes too.  You have a target on your chest screaming take my money.

That all being said, there is much money to be made in Asia over the next 20 years.  If you know how to do it and choose partners wisely.  Vietnam and some of the other countries are like the Wild West right now and fortunes will be made by many unless China swoops in and  controls the area more than they already are trying.  

Be also careful of the crime.  Philippines currently has some very rough areas and the drug wars between the government and the people is all over the place.

Be VERY careful!  You cannot legally be marketing and selling properties you do not own.  You can market a contract if you are party to the contract. But if your name is not on it then you are acting as a realtor without a license.  

Most wholesalers will tell you you can do it because they have been told by some guru you can do it.  But they are wrong.  In my state and most others it is a felony if you get caught.  Will you get caught?  Probably not.  Most people get caught when a deal goes bad and the seller files a complaint against the contract holder. Then it goes very bad!  tens of thousands in attorney fees for you , fines in the tens of thousands or possibly over 100,000. Because once the can or investigation opens the RE Commission looks at all your past work.  If you have done many deals then you get fined on each one.

And the kicker is that if you think bankruptcy will get you out of the financial mess, think again.  Criminal fines and judgments aren't dismissed by bankruptcy.

Is it worth it to take shortcuts for a few dollars?

Force yourself into uncomfortable positions so you can get comfortable.  I have all my students actually go to a McDonald's and ask for a whopper or go to Wendys and ask for a Quarterpounder with cheese. The salesperson will obviously say we don't sell those and I tell the students to say I know but that is what I want.  Then laugh and order correctly.  Get comfortable being uncomfortable and the fears disappear.   Practice gets you better and past the fears of what you do.

The fears are 100 times as bad as reality.  But it is human nature.

Hi Everyone,

I use my bank's Cash Management services. I can draft their bank accounts on the first business day of each month or set up different days for those who choose biweekly.  The cost is minimal and I get the money the same day.

Also, as you grow your business you don't want to be spending all your time doing collections.  Most landlords spend up to 30% of their time chasing money.  not me.  I also use it as a screening tool.  If they don't have a bank account they don't qualify for my properties.  If they don't have a bank account they are high risk renters. They either have hot checks outstanding, can't keep a job and constantly moving, etc.  

I tell a potential renter up front this so I don't show properties to those who can't qualify. Saves time and money.  I also tell them that if they bounce the ACH draft they have to chase me down to get me the money. I don't chase them and if they don't, then on the third business day an automatic eviction letter goes out.  Once that happens they are gone, because I don't pay people to live in my houses, which is what your are doing.  This is a business and if they have bills to pay they need to make the house the first payment they make.  Otherwise they will  be living in their car.  It's business and you must think of it as a business transaction.  Renters know every trick in the book to try and delay and not pay.  Screen well, take no excuses and train your tenants to your expectations or you will be one of those "tired landlords" yourself soon.

Don't think of this as being cold or a As******.  Businesses stay afloat because they do things using systems and if you change and make exceptions then you lose your business and also possibly open yourself for a discrimination lawsuit because you enforced it on some but not all tenants.

Find a system and live by it.

Hi Daniel,

Yes, always have an inspection clause in your contract, even if you are buying "As, Is." This gives you the right to cancel in the event you find more repairs or the seller hid something from you that is detrimental.  And just because they say they won't negotiate doesn't mean they won't. It's a psychological thing for most people that once they have a fish on the line (you) they don't want to lose you.  Many times I have entered into an agreement like that and because of an inspection told the owner I had two choices, cancel the deal or change the sales price.  More often than not the price changed.  But also be willing to walk away. 

Just like you are looking for motivated sellers, sellers are looking for motivated buyers.  If you are more motivated than them then you will almost always lose the negotiation. Many times I have politely got up from the table and wished the sellers well and started to leave before they called me back to the table with an agreement to change the price.  

Happy Hunting out there!  But always dot your i's on your contract paperwork to protect your interest.

Wow, this seems to be the hottest contested topic on this forum.  I would like to add one more thing that I haven't seen pointed out here.  

One of the leading RE attorneys in the US has been very vocal on this subject and has worked with different state commissions to help straighten these problems out. 

Here is what has come about and what realistically makes most people doing wholesaling wrong or illegally get in trouble.  You ARE  allowed to assign contracts.  Commissions agree on that point. BUT if your business model is to only do assignments then you are not wholesaling. You are acting like a broker then because your are not putting yourself at risk.  To have a valid contract you MUST have two things - 1- the ability to close and 2 the intention to close.  If you sign a contract and your intention is never to close then you don't have a legal contract.  If you can't fund the close in some way then you don't have capacity and therefore the contract is invalid.  

A good and legal wholesaler will often close/ double close on transactions.  That is one of the things commissions look for.  Do you assign all your deals or do your close some and assign some.  If you close some you have capacity and intention but sometimes assigning is a better strategy, such as a low profit deal.    

If you are an "investor" who buys rentals or rehabs and also assigns some deals you are an investor in their eyes.  But even in this scenario you must advertise your contract for sale and not the property for sale if you don't own it.  We teach our people this strictly because these are the key points the commissions are looking for.  Advertise the contract not the property, have the capacity and intention to close and you are good to go.

I agree with some of what you say and not others. There are good and bad wholesalers just as there are good and bad realtors. I rountinaly see realtors listing houses for too high a price for sellers just so they can get the listing and knowing that they can’t sell at that price, but will convince the seller to lower the price later. But the name of the game is listings. That’s what their brokers teach too. 

Me personally, i rehab, buy rentals, buy notes, create notes, and wholesale some too. 

I totally agree that most people are doing it illegally, acting as a realtor without a license. I can’t wait for most of them to wash out over the next year or two or the RE commission to catch then and fine them  a couple of case like that would scare a lot of people out of doing this     But you can’t ever bet a commission authority to make a definitive statement about it.  I’ve been trying for a year to get my state commission to soeak to our reia but they don’t want to get pinned down to specific answers.  

But in any industry you have good and bad actors. Don't paint everybody with one brush. I will agree that this one has more than its’s share of them though thanks to the “gurus” telling them how easy the business is and you dont need money to make a fortune doing it. 

Hi Meryl,

Thought I would add my two cents worth. @Lydia R. is spot on and a good representative of the industry, in my opinion.  What we do is solve problems.  We usually solve problems that realtors and others can't solve or won't solve.  Houses that need major repairs are examples of what realtors have a hard time selling because nobody can get a bank loan as is, unless it's an investor who has credit lines or cash of their own.  

I look at it this way and train beginners to shift their mindset to this. 

If you had a 4 year old child with an inoperable brain tumor and the hospital said sorry he was going die, but before you gave up you researched and found two doctors in another state who had come up with an experimental surgery  that has been successful.  I am sure you would go.  One doctor was older and pioneered the surgery and had done about 20 of them. He charges $60,000 to do it.  The other doctor is younger and new but trained under the other doctor and has done 2 surgeries but only charges 30,000.  Which doctor are you going to take your child to?  If you are like most people I would do whatever I had to do to come up with the 60,000 to make sure my child survived.  

We as good wholesalers have specialized knowledge and training and EXPERIENCE to help people solve their issues.  No one else is solving the issue for them. Not realtors. Not other family members. Not the government.  Just us.  We get paid for our expertise.  Never feel guilty about getting paid for your services that you have spent time and money learning, just like the doctor did in med school.  

I routinely get hugs after closing with a motivated seller.  Recently I got and hug and kiss from a lady who had a bad case of Lupus and after 5 delayed closing dates because she couldn't get out of bed on those dates , We got it closed. The morning of closing she called and told me she was going to make she thought.  I told her I knew that already and that there was a rumor that Santa had made a surprise visit to the title company and had left some Godiva Truffles for someone.  She laughed.  When she arrived there was a box of 8 truffles at her position at the table.  She wobbled in with her two crutches and sat.  Didn't even notice them.  Afterwards the title closer told her not to forget her box.  She laughed and opened them. She struggled to stand and wobbled to me and hugged me and with tears in her eyes and told me I probably extended her life by at least 5 years by getting the stress of rental property off her hands that she had inherited.  The title lady was crying and I had tears too.   The title lady ( who was the owner of the company) said afterwards, "Now I get what you do."   

We help people that no one else can or will!

The algorithms used average properties in an area.  They don't compare like properties and I have seen them off by over 200k because upscale neighborhoods being smaller and nearby starter home neighborhoods being several times larger skew the models.  Never use Zestimates for buying unless they are underpriced and you can use them to show the seller they are asking to much for their property.  Only them can it be a powerful tool.