All Forum Posts by: Ryan Webber

No, Troy, you are NOT clear.

ANY entity will accomplish that, just as Charles shared. All entities will require separate tax returns with the IRS unless its a sole proprietorship Limited Liability Company (LLC) and you elect to not file a separate return with the IRS.

A pass through entity does NOT mean that you have only one tax return. A pass through entity (with the exception of the above referenced LLC) must have its own tax return. I think you are confused on the wording here, and you are making a decision to have a C corp for the wrong reasons.

Even if you want the C corp for tax purposes (which that does not seem to be the case with you), an LLC is the easiest to setup and maintain, and, if you are a sole proprietorship, you can elect to be considered a C corp with the IRS. You get the ease of an LLC and the tax write offs of the C corp (if that's what you are looking for).

Either way, you have to have separate accounts, records, etc with ALL entities, no matter what. If you don't keep the records separate then you face the likely possibility of losing your corporate veil protection if you ever get sued, just as Bryan shared. That means your personal assets are liable for your business' mistakes.

You really need to talk to a qualified accountant in your state about how to structure your business. Different entities in different states also have different tax liabilities on a state level.

So, Troy, let me make this real clear for you - MAKING THESE DECISIONS WITHOUT DIRECTION FROM A QUALIFIED ACCOUNTANT IN YOUR STATE IS A MISTAKE.

Originally posted by Mark Claire:

Am I walking around with a blank contract, filling it out, having them sign it and sending it over to my attorney?

Yes, I ALWAYS keep a blank contract on me, but we close with title agents here. Next step when you find a deal is to get it under contract.

Originally posted by Financeexaminer:

Well, Ryan, come on up!

Bill, maybe someday but not yet. I have enough of myself spread out right now. I appreciate the invite, though, and the offer of BBQ.

My point is that if people are still buying and selling houses in your town then I guarantee you that wholesaling could be done profitably in your town.

Deals are slim pick'ns in every town . . . until you figure out a system to find them. Deals don't fall into your lap. Being a successful wholesaler in any town requires consistent and persistent effort. Its not easy. Its work, and most people don't apply themselves consistently and persistently enough in the proper ways to find smoking deals on a consistent basis. That's not just a Springfield, Missouri issue, it's an issue with most wholesalers across the nation. It's an issue with wholesalers in my own town.

Every time I talk to one of the old time investors they always complain that they don't find deals anymore like they used to. Its because the game has changed and there are investors, like myself, that aggressively go and find the deals. There is no low lying fruit anymore, but the old timers still expect it to fall in their laps like it did decades ago. The game HAS changed, but for the investor that is willing to aggressively market and go and find deals there are STILL HUNDREDS of opportunities out there.

Even in MY town, and even in YOUR town.

Well I'm a sucker for a good debate. :D

Bryan, bottom line, do what you say you are going to do. Quit making excuses why its okay to sacrifice your integrity.

Originally posted by Financexaminer:

My 2 cents, it depends on the market you are in. Amarillo, is no small cow town. There are obviously enough properties to feed your strategy Ryan and it makes sence.

Amarillo has about 180,000 people. About the same as Springfield, MO.

Originally posted by Financexaminer:

In my area, wholesaling really would not be that profitable, there are a ton of rehab investors but the inventory of distressed properties is low. The market and the opportunity at hand dictates the strategy that will be most profitable. When one of these properties does surface, rehabbers snap them up at a premium and then must go to the retail market to profit.

Your market sounds like a PERFECT market for wholesaling. It sounds like I would make a killing wholesaling in your market. I think your issue is less about the market and more about perception. Lots of rehabbers that will pay premium prices is exactly what I like to see. You see competition and I see customers to sell to.

Acres of Diamonds by Conwell. Buy it for $5 at Amazon. I highly recommend you read it.

Originally posted by Mark Claire:

How do you get around Proof of Funds?
When I'm making an offer in Cash, they want to see it. And when going conventional, they want the pre-approval & with pre-approval, you need to show the down deposit + 6 months reserves (taxes / insurance etc).

So, what is the magic formula that lets you get a house under contract with 1,000 earnest money in your bank and not a penny more???

You don't need Proof of Funds, and you don't need earnest money. You don't need to have financing lined up. Go for motivated sellers directly to start with. Forget listed properties (which is where you need POF's and earnest money). Stop looking at listed properties. Homeowners don't care about POF's and they don't want to see the cash.

Originally posted by Teddy Patrick, Jr:

So when I find a distressed property in my area, I simply find the owner do an analysis of the the deal to determine whether its a deal or not, put it under contract with a deposit, then flip the contract to a end buyer.........

Yes, but no deposit is required.

Originally posted by Teddy Patrick, Jr:

What is the best way to find these wholesale deals? Realtors..... Or on your own, driving for dollars?

There are hundreds of ways to find deals. Which ones are best for you depends on your budget, your time availability, and your market. Pick a couple strategies that fit your budget, time, and market and do them consistently and persistently. Once you are doing those 2 or 3 methods consistently and persistently add 2 or 3 more strategies to do consistently and persistently. Then do a couple more and so on and so on until you are doing 10-15 different things consistently and persistently to find deals. Analyze them every 6 months or so to assess effectiveness and change them up if they aren't working.

HOLY COW!!!! This is one of the very first threads I ever posted in. Teddy, you're a rock star!!!

To answer your question, no, you don't need your own money or credit as a wholesaler except for the cash that you will spend in marketing and the cash you may need for earnest money to make offers on listed properties.

When you agree to do something with just your words, or even that much more in a contract, then I believe that you have an absolute obligation to fulfill that agreement.

Whether the market goes up or down, whether the lender is sophisticated or not, whether its recourse or not, your integrity as a business person is at stake.

Bryan, whether you were personally liable or not, I wouldn't trust you if you let ANY properties go back to EVEN a sophisticated lender that was hedging their losses. If anyone asked me about your integrity I would have to communicate my lack of trust for you because of your default on those NON-RECOURSE loans.

I don't know about the whole thing with Rich, but even with your position just on this post, I don't fully trust you and wouldn't feel comfortable loaning you money. Dancing through the little loopholes like you are, makes me feel dirty.

Be honest, be upfront, and do what you say you are going to do. Even if the agreement is with a filthy rich lender that has hedged their portfolio and the market just isn't looking as good for you anymore, you still have an obligation to fulfill your word.

Help me out here Curt. Who are you talking about?

Delondon, I would guess that you haven't done any double closings then. That's how assignments are structured but not double closings. A double closing is actually 2 whole and separate transactions. Two sets of fees are incurred.

1/2 of costs of 1 transaction and 1/2 of another transaction equals 1 full transaction paid for out of 2 transactions needed. You would still have a whole nother transaction to pay for.

Even if your title agent doesn't charge you twice, he or she will probably charge you once. So you would still owe for 1/2 of a transaction.

Some agents may not even charge you once, but that still doesn't take into account the title policy difference (if you're paying for a title policy, which in my area is customary when you are selling). You buy a house for 50K and get the seller to give you a title policy that costs lets say $500, but when you go to sell for 55K the title policy costs $550. That cost difference has to come from somewhere.

Now if you make the seller pay for all closing costs (yours and theirs) on the buy side and the buyer pay for all closing costs on the sell side(yours and theirs) then you would have no closing costs on a double close.

I personally have never set one up that way or ever heard of a wholesaler setting up a double close that way, but you could.

That's too obvious Josh.

Anthony, you just posted your desire of finding knowledge in wholesaling at the top of a forum that is, in my opinion, the most exhaustive, informative, and relevant resource on wholesaling that exists in the market today. On top of all that, its completely FREE of charge.

I've wholesaled over 300 houses and I'll be glad to help you gain knowledge in wholesaling.

Step 1 - read through the entire Wholesaling Forum on BP

Step 2 - post any questions you have

Step 3 - go find a deal

Step 4 - go sell it

Step 5 - repeat

Bryan,

I used to not give title insurance on my wraps when I was selling them and then I had an attorney that I highly respect hand me the law that very clearly said I either have to disclose to the buyer many exact particulars about my financing or title insurance has to be provided. Provided not meaning that I have to buy it, but provided that the buyer gets a policy one way or another.

I don't recall and I can't seem to find the handout he gave me about the particular consequences if you don't do either, but they were severe enough that I decided it was definitely not worth the risk.

Needless to say, I always give title insurance on the sell side of my wraps now.