All Forum Posts by: Ryan Webber

Different title companies/agents deal with it differently.

I've had some title agents who require nothing from me and tell me I have to report it myself. Others do report it, but I don't think its a 1099, and its definitely not at closing. Calling the title agent/company that you will be dealing with is the best idea for that one.

Back taxes are not an issue. As Gregory stated it normally comes out of the seller's proceeds.

Now if the town has foreclosed on the property, that definitely would be a problem. You need to have a title search done on the property. If the town already has taken ownership then you could look into possible statutory redemption laws for tax foreclosures. In Texas, the owner has up to 2 years under some circumstances to buy back the property from the county or from any other buyer that the county may have sold the property to.

I have a list of about 300 potential buyers, but that list was generated over the last six years. I used to work with about 30 serious buyers, but right now its more like 10-15.

With the economy slower and lending tighter, even in my local area that is still very strong, I've seen a dramatic decrease in investors buying. Which means that I need more tire kickers to find my serious investors. I used to always follow that for every 10 on my list, 1 was a serious buyers. Now I would say its closer to for every 20, 1 will be a serious buyer.

The bottom line is not how many investors you have on your list, but how many SERIOUS buyers do you have on your list. Over the course of 6 years I had to build a list of 300+ to find 30 serious buyers. With what I know now, I would focus much more on finding the 30 serious buyers and forget about the other 270.

I think everything said on here is right on.

Most wholesalers are newbies and don't know a good deal from a bad one. So most deals you will find from newbie wholesalers are NOT deals. Do your own due diligence!!! If you let someone else make your financial decisions for you, you won't last very long in this business.

A good wholesaler will beat out most of everything you can find on the MLS. I know that because I do. I sell properties cheaper than you can find on ANY public market.

Yes, most wholesale deals will go down before and without you ever knowing what happened. A good wholesaler normally doesn't like wasting their time babysitting a new investor. They are looking for serious investors that can quickly take multiple deals down.

I probably work with one new investor for every 5-10 deals I do, and they will require 5 times the time and effort than an experienced investor would. I do that because I've helped multiple newbie's grow into experienced investors that don't require me to hold their hand. Its good for long term business, but it does require a good deal of time and patience on my part.

I have to admit that I also do get some personal satisfaction out of just helping other people be successful in the business.

If I remember correctly the Texas Real Estate Licensing Act says that an agent can list the property only if they sign a listing agreement with the owner.

Yes, you do have an equitable interest in the property but no, you are not the owner. I would think that most realtors are going to tell you no whether you have a contractual right to market it or not.

:lol: That's good stuff Scott

Most states real estate licensing laws say that as a real estate agent you can not list or market a property unless you have contracted with the owner to do so.

I have never seen any non-real estate agent laws that say you can not market a property unless you own it. And legally you do have an equitable interest in the property through your contract, which means that you are not acting as an agent. As a wholesaler you are attempting to sell YOUR interest in the property which is via a contract to purchase it.

I would relay to you that most realtors are deeply ingrained with the idea that everything outside of their box is "illegal", and many times for a licensed real estate agent it very well may be.

For non-agents, though, the laws aren't as thorough or detailed and many things that are "illegal" for a realtor are perfectly legal for a non-agent. I would recommend that you stop talking to your agent about wholesaling. They don't understand it and most of them have very negative ideas about it.

Until there is case law backing up the idea that intent determines if you fall under the Act or not, I think you are playing with fire. I'm not an attorney, but it seems to me that the law does include short salers and really anybody that does any of the referenced actions. Until there's more judicial interpretstion I would be very cautious and I would guess that a good attorney would tell you the same thing.

Well at that point you're not really wholesaling. At that point you are doing a wrap around mortgage, which if you are comfortable with the numbers on the deal that might be a good idea for you.

Your statement that its in a war zone concerns me. War zones are not the place to be doing business, even for $13,800. War zones have extremely high crime rates, a high percentage of abandoned houses (15-20%+), and a very low percentage of investors, buyers, or worthwhile tenants. If its an actual war zone, I would probably pass.

Now let me balance the idea of a war zone with the fact that many newer investors think an area is a war zone because they don't personally feel comfortable there but many times its really just a lower end area. You can make a lot of money in lower end areas, but you will not make much of anything in a war zone.

I would check the retail market in that area to get a better idea. Lower end areas usually still have a reasonable amount of retail activity. War zones don't. If everything in your mind is screaming war zone check and see how many closed transactions on the MLS happened in that area compared to some of the other areas in town. The war zone in my town will have less than 5 closings a year while other low end areas range from 15-50.

Now let me balance that just because it doesn't have much retail activity does NOT mean it is necessarily a war zone, but if everything is pointing at war zone and it has no retail activity then I would stay away from it.

I once came across a relatively large lower end neighborhood that only had 2 or 3 retail closings a year, but when I drove through it I could barely find any vacant houses, for rent signs, or for sale signs. The houses were taken care of fairly well. With some digging I figured out that the area was a strong Hispanic area that people rarely moved in or out of, and most of the sales were owner financing.

Now if its not a war zone and you are wanting to maximize your cash flow, I would recommend you look into possibly doing a wrap around mortgage to a retail buyer. I would research the market rent for the property and then offer owner financing (PITI) at that rental amount with a reasonable amount of down payment depending on the area and condition.

So if the market rent is $500 a month for that house, I would factor out taxes and insurance, which let's say is $100 total, and then work backwards with the $400 to amortize on a 30 year note at the desired interest rate (I normally use 12%). So if I were using 12% on a 30 year note then $400 a month is roughly a $39,000 note amount and let's say I would require $2,000 down, so my sales price would be $41,000.

$2,000 down
$500 monthly payment
$41,000 sales price

You would be making somewhere in the ballpark of $300 gross profit a month plus the down payment.

Applicable state and federal laws also need to be considered when doing any type of financing. Sometimes its easier just to rent the property.

:wowie:

Politicians don't care about your living. They care about votes, and that means we are definitely not their priority.

And frankly investor speculation was one of the major contributors to the over inflation in the bubble markets. I would think most people and especially most liberal politicians care more much about protecting the person in foreclosure from any possible threat then ensuring you can make tens or hundreds of thousands of dollars in profit from them.

I would always be weary betting on people's empathy