All Forum Posts by: Sean Cole

@Derek Meehan that's exactly the kind of enthusiasm I'd be looking for if you were local.  I wish you good luck with your pursuit!

If you do decide to paint it, you'll want to have it done on a very warm day so that the vinyl siding has expanded along it's length.  I once painted a house with vinyl siding during the Spring, only to find little vertical lines at every seam when the vinyl got hot in the summer and expanded.  Looked like crap.

So you tell sellers at closing that you could have paid more?   Otherwise you're not being 100% honest, open, forthright and truthful.

I do far more work as a wholesaler in a transaction than I do when I act as a real estate agent and often make far more acting as an agent.  Now, it could be different in other states, but at least in Ohio the Division of Real Estate will bring enforcement actions against unlicensed people if they believe they're doing things that require a license.  I've had several long conversations with various people in the Division and we're comfortable that our activities fall within the law. 

Ethics are subjective.  The law rarely is.  I'll go by the law saying I'm legal over your ethical questions.

 Do you always offer 100% of what you'd be willing to pay when you're negotiating with a seller?  Otherwise, I guess I'm failing to see the difference between what a wholesaler does and what you're doing, at least as it relates to offer price.  By your logic, it seems that all people should offer the max they're willing to pay, otherwise they're taking advantage of a seller.  The difference between what a wholesaler is doing and what most investors are doing is that the wholesaler is receiving that extra profit margin instead of it going to the investor/rehabber.

 You've inadvertently outlined the value that wholesalers bring to some people.  You're not spending thousands or tens of thousands of dollars and hundreds of hours a month looking for your 1-2 flips a year.  The wholesaler is doing that work for you, and instead of paying the marketing fees and a wage to someone on your "team" to do that, you're paying the wholesaler's fee for the house you actually bought from them.

I get why some people don't like wholesalers - there's plenty of people with no real estate experience or education doing it and some are pretty unethical.  Arguing, however, that a wholesaler buying a property for less than market value makes them a snake is disingenuous because there's not an investor on BP that doesn't try to buy a house as cheaply as possible, market value be damned.

If you step out of real estate for a second, the term "wholesale" is actually a pretty accurate term - and it's not one with a negative connotation except in real estate.  What value does a wholesaler or distributor add in a retail sales chain?  Not much - they didn't manufacture the product, they didn't transport the product necessarily, etc.  They're taking large lots that are too large for what the retail customer actually can use, and breaking them down into usable lots.  An active/full-time real estate wholesaler is doing the same thing.  He/she is finding 30, or 70 or 100 or whatever deals a year and selling you the 1 or 2 a year that you can actually do.  

For OP, there's enough investors in the world that you don't need to have people on your buyer's list who despise who you are and what you do.  To answer the original question, if you're doing an Assignment, the buyer has to know your fee by definition because they have to sign off on the original contract.  If you're double-closing, they'll figure it out eventually when it all becomes public record.  If someone gets hung up on your fee, don't sell to them.  They aren't the right customer.  

 I've been rehabbing and wholesaling since 2012.  In the beginning, I did a lot of work myself to try to save money, but eventually realized that I was only saving money because I wasn't assigning any value to my time.  I haven't "swung a hammer" on a rehab in quite some time - probably since 2013 or so.  I project manage now, which isn't necessarily easier or better, it's just more efficient with my time as I have other businesses that generate revenue, including new construction/custom remodels and a thriving real estate agency business.

Contractors have always been the biggest challenge for me in the business.  We'll find a good one that's priced right and then get him so busy that his prices go up and/or he wakes up stupid one day and never shows up again.  Then we have to find a new one.  It's a bit more expensive, but I've been a big fan of hiring a GC with his/her own crew over the last couple of years.

Tiffany, you'll probably find that subbing out more of the work that your husband is doing will allow you to grow faster than hiring an employee, but it just becomes a math problem to figure out if increased labor costs are offset by the higher overall revenue generated by doing more flips each year.

Hey Nick, I'd be interested in at least chatting with you.  Shoot me a message and let's connect.

@Michael Hayworth is about the only one here who's acknowledged that we're in an absolute seller's market right now.  No buyer is walking over a REQUEST for $400 and risking starting over.  

They fail because they're brand new to real estate investing, which means:

- they don't know how to accurately assess repairs

- they don't know how to accurately assess ARV

- they don't know anything about contracts, negotiating, closing

They also tend to have $0 money, which means:

- they have no money to market to homeowners

- they have no money to market to investors

- they are in a hurry to get a deal done, which means that EVERY deals looks like a great deal

- they can't double close a transaction