All Forum Posts by: Ryan Webber

Lol, so I sacrifice my integrity by asking for MLS access? Wow, right off the cliff with that one.

I have NEVER screwed any realtor or investor, and there have been multiple times I have gone way above and beyond financially to make sure that no one might feel like they got screwed.

Yes, there are multiple realtors that I work with that have violated their sacred oaths of secrecy to the MLS God and I STILL trust them.

Yes, I will ask you to cut your commission, yes, I will ask for your MLS access even though its against the rules, and, yes, I will ask you to sacrifice your first born to the Dark Side.

Funny thing, though, my reputation and integrity is still intact. 6 years and 250 houses later and I'm still going. I do feel a little dirty, though, but I always do after I've been talking with realtors. :goofy:

The paperwork ($150-$500 from an attorney) and filing fees ($20-$50).

I guess if you wanted to close it at a title company there would be an escrow fee.

I've never done an actual "closing" for a note purchase. After verifying clear title, I get an assignment of deed of trust and the note, and they get a check or vice versa if I'm selling it.

Well I personally am of the basic philosophy that if they've paid their debt to society then what right do I have to hold it against them.

Now I do balance this with business liability. In my multi-dwellings I would not rent to a registered sex offender. In a single family home I don't have much of an issue, depending on their case. I always prefer them to still be on probation or parole. This insures that they will be keeping a job so the rent gets paid.

The circumstances of the case do make a difference to me. I used to have a guy working for me that when he was a senior in high school he had consensual sex with a freshman at a party. Her dad didn't appreciate that and the DA ended up pressing charges against him. He screwed off his probation and went to prison for six years for it. Now he's a registered sex offender for the rest of his life. Would I rent to him? ABSOLUTELY. Would I mind if he lived next door to me and played with my kids? ABSOLUTELY NOT.

Not to say that there aren't people among us who have done some despicable things, but I think grouping them all together is a mistake.

You can wholesale in any market where there are still buyers, and I'll guarantee you that there are still buyers in Vegas. Now the question is what percentage of current After Repaired Value (ARV) are they buying at.

Now I would hypothesize that in a market like that short sales and REO's are going to be strong avenues for a wholesaler to find deals, but I still think there's potential in other strategies.

If you think about it, a wholesaler is going to buy very few houses that the seller bought or refinanced within the last 10 years, and most of them will have been owned for 20+ years. Now I think the fire of those markets probably motivated a higher percentage of people to refinance, but I would guess that there is still of pocket of owners in those markets with untouched equity. You just have to find them.

Traditionally 1/3 of houses have no mortgage debt against them. The house is free and clear. So maybe most mortgaged homeowners are underwater, but there's still a good chunk of homeowners with plenty of room to negotiate when selling their house.

Echoing Steve and Jon here, wholesaling is selling to cash or cash equivalent buyers. Cash equivalent being hard money, commercial loans, or lines of credit.

A commercial loan is a loan from the commercial department of a bank and is not a conventional loan.

Shannon, I like some of what you have to say, but its obvious that you are a realtor.

Originally posted by Shannon Feol:

Ask any newbie investor how to write up an offer or if they really understand all the terminology in a 40 page bank addendum and see what they say. Are they aware of any disclosures that should accompany the contract? . . .

. . . They also make it a lot easier to bid on HUD and VA properties.

Most realtors don't read or understand the bank's addendums either. I'm the type of person that actually reads the addendums and I've never gotten more than a blank stare when I ask any realtor a question about them.

And if you are making an offer on listed property, the listing agent will make sure you sign the proper disclosures.

I am all for working with realtors, but I would also recommend that as an investor you should learn your state's standard contract and contract laws. A Law of Contracts class at a local community college or online course would be a good investment of your time and money.

In reference to putting in offers on HUD properties, you normally have to use a realtor. In my region you can NOT make an offer on HUD's without a realtor.

Originally posted by Shannon Feol:

*side note: be careful if an agent gives you their login information/password for MLS access. In TN it is ILLEGAL and he/she could lose their license (not sure about other states.)

If an agent does NOT give me access, I won't be working with them long term.

"ILLEGAL" is a strong word thrown around by realtors way too much. A realtor "could" lose their license for running a red light, but they aren't going to. I don't know Tennessee licensing law but I seriously doubt their licensing act addresses MLS access. Normally the MLS is hosted by a local association of realtors and they normally do NOT have the authority to suspend a realtor's license. Now the local association can suspend a realtor from the association (i.e. MLS access), but that does not mean they would lose their license.

Now if a realtor is being charged $3 an hour for the MLS then I would lean towards compensating them in one way or another for that access.

As Bienes shared, realtors normally have little or no understanding of what a good investment is. They think in terms of appreciation because its an easy sell for them, but its bad business for 95% of investors. If you are letting anyone else make your business decisions for you, you won't be in business long. Your focus needs to be to learn this business well enough that you are not dependent on someone else's opinion. Maybe you will need information from someone (i.e. comps from a realtor), but you need to get to the point that you do not need their opinion on whether something is a good deal or not. What most realtors "think" is a good deal is a total loser for most investors.

Inform and educate yourself, so you will be adequately equipped to make knowledgeable choices about your investing.

Mike tolerant of others beliefs . . .?

I think I'm in the wrong forum. :crazed:

Believe me, they don't always. I've done about 500 closings and 90% of them my title agent said quote "We will not report this to the IRS. It is your responsibility to do that."

I've NEVER received any IRS tax paperwork at closing or even at the end of the year. I've always had to give my accountant numbers off of my HUD-1's, but I've never received anything from the title company. I do remember that a couple times when I closed with different title companies that I had to sign an IRS form, and they said they were going to report it, but they did not give or send me a 1099 or any other IRS paperwork.

Again, I have NEVER received a 1099 or any other IRS paperwork from the title company.

1099's are for reporting payments to NON-corporations except for payments for legal advice. If you are buying or selling in a corporate entity then you aren't going to get a 1099.

Again, checking with your title company/agent and/or accountant is your best bet.

Originally posted by Eddie Ziv:

Originally posted by DemosL:

As Steph said, the buyer needs to do their own due diligence. Caveat Emptor (let the buyer beware). Good deals or bad deals are all subjective. What one investor thinks is a bad deal, may be a great deal for the next investor.

I completely disagree with this assertion. A bad deal is a bad deal and good one is good. You may argue that some would see a great deal as other would only rank it as good. Same thing with bad and "terrible".
The only instance where I would agree with this assertion is when purposing a deal. For example. I own a property near Austin, TX which I bought about a year ago. The house barely breaks even in rent and under certain calculation it even looses money. From a pure cash flow POV, it's a bad deal because it doesn't produce income, however I didn't buy it to enjoy income today. I bought it so I can enjoy that income 10-15 years from now when I retire while the house gain some equity. Since I have other means of income today, I don't mind if I have to round the number by adding another $60 a month.

You kind of proved Steph's point. Was your deal a bad deal according to normal cash flow numbers? Yes. But to you, was it still an okay enough deal to purchase because of your investment goals and financial situation? Yes.

Rehab deals are black and white, you will either make money or you will not. The only factor to consider is what percentage or profit margin you are willing to take for the risk involved. Rental properties or other long term holds are a different story. One property for one person's investment goals is a good deal while for another investor its a total bomb.

Now I personally am very conservative on my long term holds and more than 95% of what I see other investors buying I wouldn't even think of touching. Many times I see these investors flounder because of their liberalness with some of the numbers on these properties, but if they have a solid enough investment plan that is in line with their finances then it can still be a good deal for them.

I know doctors, attorneys, and accountants that invest solely for long term equity and appreciation as they pay off their properties on a 10 or 15 year note. To them its a retirement account. They don't care if it cash flows at all. They don't need the income to live on or to survive and are looking for something to invest their money in that will beat the stock market.

Is it unwise or is it a bad deal if they buy something that doesn't cash flow and is merely paying down equity on a 10 year note? My answer would be if that fits into their investment goals and they can financially sustain the properties if they needed to because of vacancies or maintenance, then, yes, its a good deal for them.

Could they find better deals if they were willing to invest more time? Absolutely. Is it always worth it to them to trade their time to find the better deals? Absolutely not.

The biggest issue is if its an REO or not. If its a normal seller, then you can double close it to your buyer or you will need to amend the contract as Justin and Craig referenced so you can assign it.

You probably used Texas' promulgated "TREC" contract, and it does not have assignment language in it, so you will need to either amend the buyers name to your buyer or add "and/or assigns" to your name IF you want to assign it.

If its an REO, assigning the property is not an option, and you will need to double close the property. You will need to be able to pick the title company in order to do that. Find a title agent who will do double clsoings. If its a Fannie Mae REO you will also need to double check if there are any deed restrictions on reselling it.

I wouldn't recommend Justin's strategy of quit claiming it after closing. One because what he described is pretty much a double closing and the title agent can do it, and two, a quit claim is a no-no in Texas. You would want to use a special warranty deed. The bigger point being, just use the people that know what they're doing (i.e. title agents and attorneys).