All Forum Posts by: Tom V.

How much will it cost per square foot to build your houses?

This has been a great wholesale ethics thread.  I hope everyone can now help this guy figure out how to pull a fast one on his seller. Really, I mean that's what BP is all about, right?  People helping people.  

While you're at it, stop by this thread and give the guy props for taking a 60% spread on a single wide mobile home.  I mean, the seller wanted to sell, right?  That's a great way to help out a 'friend' as the wholesaler describes his seller.   

In the immortal words of Ron Burgundy, "You stay classy, San Diego."

Just be honest.  

Tell them that their house is worth a lot more than you are paying them. 

Tell them that you don't have a real estate license, but you are brokering the sale of their house to another individual.  

Explain what a large piece you are trying to take out of the transaction and that they should be happy to get any cash at all.   That if they wanted the fair value of their house, they should have been working with an actual real estate agent who would help them get the highest price possible.  

Or just find a way to lie to them.  

Best of luck.  

It is not unreasonable to ask for a signed PSA prior to requesting a tenant open his home for a third party inspection.  

Your PSA must have contingencies to get you out of contract if the home is horrific.

If you can't negotiate a price wherein you will be willing to venture $3-400 for an inspection (if you are uncomfortable doing one yourself), then your risk tolerance for flipping this house is too low, or it isn't a good deal to begin with.  

You have to ante up a little to sit at the table.  Normally an inspection from a third party is a great tool for a buyer.  You get in contract at price X, then your inspector 'uncovers lots of problems' and you negotiate down to X-Y.  Y is almost always greater than the cost of the inspection.      

If you are not actually buying the house, you are intermediating the sale of the house to another buyer.  Under most state real estate laws, that activity counts as brokering real estate.  You should have a brokerage license if you are intermediating real estate sales.

So, should you say, "I buy houses for cash" if you are not buying houses for cash?  

Should I say I am a physician if I am not a physician?  Let's structure the wholesalers' explanation: "Well, I actually know a physician and when the time comes to do the operation I will get a physician in the room, but in the meantime you pay me $15K for the operation and I will pay the surgeon $10K for it.  We call it a double close."  

Or: "I am assigning my rights and responsibilities to perform an operation to a physician even though I represented that I was qualified to perform the surgery."

I find honesty and following the law tend to be good policies.  

Sounds like it would be to speak to a contractor and understand what is allowed by the HOA.

All HOA documents should be available either as a public record or a disclosure in contract.

People remodel units within large buildings all the time.   A general case is not terribly helpful - one needs to understand the specific situation.  

Make a list of the things that you want the contractor to fix.  It could be specific items on the inspection report.  Get what you want fixed.  The contractor just wants clear instructions for bidding.  He understands that a home inspection report is often overstated. 

If you leave an item off your list, don't expect the contractor to fix it.  

Maybe you should have your friend be prepared to define what he brings to the table for his 12-15%.    Any flipper who's head over heels to borrow money at 15% may not be the sharpest tack in the box, unless your friend can offer some other expertise to to along with it.  

Don't study real estate in college.  Have him take classes in courses he won't have the opportunity to take elsewhere later in life.  A great Shakespeare professor is hard to come by.  "How to get started in real estate" classes are literally a dime a dozen. 

Don't waste college on fake job training.  Maybe an accounting course at most.  Virtually ever college should have accounting.  

Have him consider renting an apartment and subletting to friends.  Consider buying a house and letting him manage it.  Find a part time job as a property manager.  Have him mow lawns in your neighborhood - that's how to get started in property management....  

All of these are time better spent than listening to somebody explain cap rates or mortgage applications.   That stuff comes in the professional world.  

@Brandon Turner 

I thinking pointing out when people are posting misleading information is the "nice" thing to do.  

I follow real estate regulations - don't you?

If someone here posts about how they run their business without a license and then threatens to sue people for bringing that same information to the relevant regulators - what value are they adding to the BP community?