All Forum Posts by: Mark Updegraff

@Kyle Gendron - Idon't actively market for wholesale deals but run across them through marketing from time to time.  I work with a lot of professional wholesalers, it is a full time gig IMO especially if you want to be among the best in your market.  

Another idea would be to start networking at the foreclosure steps.  A lot of those guys will not be licensed and if you can add value for them (bringing buyers for their deals) you should be able to win them over as their exclusive listing agent.  It will also give you an opportunity to wholesale if their deal is meaty enough.  And they make for a good buyers list if you are doing some wholesale marketing on your own.   Just a thought.

Mark

Question for a CPA, but wouldn't you only pay capital gains on money distributed in that fiscal year?  If you're holding the note, you'll only show whatever they're putting down plus any interest / principal they pay that year.

Welcome @Benjamin Alesi - You've stumbled upon the premier place to get a quality education on all things RE. 

 I recommend Eleuthera Bahamas for a short trip out of the US if you want a great place at a slow pace!!  

You'll have to obey disclosure laws but you should not have to pay your broker on your assignment fees given you're not getting the buyer or seller leads from the brokerage. I would be transparent with your broker on what you want to do, but I don't see why they would have a problem with it. If you're actively marketing for wholesale deals as an agent I'm sure you'll end up with more MLS listings as a result as well as picking up some listings from those that took the assignments as re-sales for retail buyers. Should be a win-win for everyone.

If you're going to FSBO you should make sure you use something like "list assist" so you get it out there on the MLS. Zillow does wonders, and it does work without MLS in markets but you'll have much more success with the MLS exposure.

How much is your time worth?  If you're a professional investor you should be making more by being and investor than by being and agent (which you'll be doing if you list you house and really want to get top dollar).  Even if you do want to "be the agent" you'll still be up against buyers who know they're dealing directly with the seller.  With an intermediary there is less of the "greedy seller" mentality that breaks apart deals.  You have two agents in the middle to make sure both you and the buyer know that they're getting a fair price.  Without this there tends to be some distrust, even if it is a better deal.  I'll go one step further, when the buyer knows that they're dealing with the seller directly they automatically discount the commissions as if it is a normal sale, and STILL want a discount.  How good are you selling?  If you're not good it may be a mistake to do this yourself.  If it is clearly evident that you're underpriced and there is strong demand, than it shouldn't matter, but then you're not getting top dollar are you?

A great agent will make you more money even after brokerage fees.  As they say, time is money.  

Some considerations:

Often we as listing agents will end up with prices over asking through great marketing and pricing combinations. Do you think you could achieve this or would it be too difficult? Do you expect offers below, at or above asking? How would you deal with multiple offers to insure you're getting the best price without pissing off everyone by appearing greedy? Super hard as a FSBO.

Agents often have an extensive buyer's list, so you'll most likely be paying 1/2 the brokerage fee to compensate a buyer's agent as you have no buyer's list and will rely on a few leads you may get where active agents may have 50 serious buyers in your market at any time.

How much will holding costs affect your bottom line if you can't sell it as quickly as a professional?

Who is going to deal with the negotiations after an inspection? As a seller's agent I can keep strength in the sellers court using a variety of tactics. This is easy to loose as a FSBO especially if you're inexperienced and don't know how to continue marketing efforts after a contract is accepted. We see too many deals die to not consistently keep marketing properties and linking up buyers / sellers from our database of active clients.

In conclusion, as a REALTOR I can most likely 

1. Get a higher contract price

2. Keep inspection concessions lower

3. Sell it more quickly

4. Keep the buyer's agent and banker performing more quickly 

5. Take care of all the paperwork

6. Provide better and more extensive marketing 

Is it worth paying for versus FSBO? IMO it is.

You won't have much success finding a professional to do your due diligence for you, so I disagree with the above advice.  Yes, a team is essential, but don't expect expert advice to do admin work for you.  As a professional REALTOR I would tell you that I would stay away from you if you used this approach.  If you want this level of detail to run analysis before purchasing, you should get your license.  Do you need to?  No.  The only thing you need to do is run a simple pro forma on every possible option in your target markets to get a feel for what you can expect.  The longer you do this, the more basis you have for comparison.  Asking someone that works in the field to provide you with data to support what is already known is annoying at best.  I would focus on charming a great real estate professional so they're kind enough to help you on your journey.  If they're ethical, and sincerely like you, they will steer you on the right path.  I think you're over complicating the process.  Keep it simple.

It is all relative to the activity level of the markets you're interested in, but if it is a decent sized market I guarantee you there is opportunity.  The secret is being able to identify it!  

I would try to think outside the box in strange markets.  If numbers are so bad is there potential to flip something from the low end into the high end if the spread is huge?  

Not every market is great for a buy and hold investors that are looking to build cash flow quickly.

You're going to be able to source good deals to keep flipping professionals loyal.  Ultimately, if you're great at sourcing the deals, they'll never want to use anyone else.  Start your efforts on how to get these.  Try things like going to the steps to find the active guys that are not broker's but rather wholesale / wholetail / flippers without license.  You can move those deals (hopefully without double close) to an end use contractor / flipper.  You would be surprised how many times the contractors don't know the brokers just because there is so much volume and so many sub markets.  

Find the product, and build relationships with flippers who need you.

Welcome @Jason Green - don't forget to upload your picture.  I finally made it to Las Vegas this year for the first time over Halloween with the family!  Best City Ever :C)

Cheers,
Mark

That is quite a spectrum of geographies, but it would make sense if you like to travel to those particular destinations.  Ultimately, the success / failure of the investor is upon his or her shoulders alone, so it really doesn't matter how many places you choose to invest.  It does matter that you buy right.  Master this, and you can buy anywhere.

You only make money when you buy.

BUT you have to buy to make money!

Cheers,

Mark