All Forum Posts by: Chris Winterhalter

Okay here is the update...

I called Loopnet to ask them about the "New" unlisted REO's and Pre-foreclosure listing feature for the Platinum users. Loopnet used to have territory sales members who were somewhat knowledgeable about the site. They also were able to offer discounts and incentives. The sales rep I talked to over the phone didn't seem very interested in selling me Loopnet. He seemed more interested in talking about how CoStar would fit my needs better (which maybe that's the case). With that being said the "New" unlisted REO's and Pre-foreclosure listings have to be inputted by a seller/broker/receiver etc and does not replace buying the actual data to handle a mailing. Essentially they just added a check box for the sellers that states this is a distressed sale. That data would then be accessible to the Platinum members and potentially all members depending on what the seller paid for. The comps data and mortgage history is a nice feature but I usually get this from my broker. I signed up for a quarter at Platinum. If I decide the features are not worth it I'll downgrade to Premium. I'll try to update the post in a few months if anything changes.

@Michael Hoss

Any update on the deal?

@Casey Spivey

I have been in your situation before. Habitational property insurance is getting more and more expensive and difficult to find good policies that meet our needs as landlords. First off I would contact a public insurance adjuster that is well known in the area and that can help you fight your denied claim. They will generally work on a commission based structure which ranges from 7-10% paid at the time of receiving your claim check. Make sure they are reputable and get references. I don't know your situation however don't stop fighting the claim. As long as you have police reports, fire report, documentation etc you have time to work out the claim (I believe 2 years even after your policy is cancelled).

Secondly I would start reaching out to insurance brokers who specialize in habitational. Many of the major insurance providers on the residential and consumer side won't underwrite your C class building unless it is 100% GUT rehabbed. I have all of my policies with Lloyds of London right now (liability separate). Reach out to the investment community in your area along with property managers, agents and other landlords. I also have a call into my agent in St. Louis to see if he is licensed in Indiana. If he is I'll send over his information.

Good luck!

Chris

@NICK YAMBURGER

Welcome to BP! Income levels for wholesalers can range wildly however can go well into the 7 figures for highly successful companies with large teams. Some of the largest wholesalers over the last 5 years have been the companies that have been able to successfully buy REO's in bulk. It takes a well funded company to be able to do this along with lots of expertise. You hear of a lot of people starting out in wholesaling however in my opinion it takes almost more expertise to be a wholesaler (successful) than it does a buy and hold single family rehabber.

I would say the natural progression for successful wholesaling operations is to move to hard money lending. The two compliment each other well. And as a wholesaler and lender you have to understand values extremely well. If I am buying for cash flow and for 5+ years I don't have to worry if my current value is off by 5%. However in a wholesale deal 5% can be the margin that makes or breaks the deal.

I'm not sure what you are looking to gain from your question however I can tell you along with many other members that wholesaling is simple but not easy. It takes capital, persistence, and the ability to constantly generate and convert leads. It also takes market expertise and a strong network and team. Good luck!

Building out your face to face network is so much more effective than direct mail. Put in the time professionally networking and it will payoff. If you are not in the right circles right now then put yourself in the right circles.

Ask if they are also investors and where they own property

@Ali Boone

You could call up Billionaire Dan Gilbert....he's quite active in Detroit investing.

@Michael Hoss

Like @Jon Klaus stated I would be on the phone shopping loans this morning. I would also be on the phone calling management companies that are suited to this area and type of property. The current management company is more inclined to paint a better picture because they are also the listing agent. They do also understand the current tenants however I think it is extremely important to get a non-bias opinion from a solid management company in the area.

@Michael Hoss who is the grocery store tenant?

You definitely can't forget about management fees. Do you have experience with retail leasing? If you don't good luck filling your vacancies properly. Properly leasing your shopping center takes experience, from having the right industry contacts (retail tenants) to being able to properly structure the lease and underwrite the deal. The first thing I would do is reach out to a management company in the area that deals with these types of complexes (C and lower). Get their opinion on the investment and make them a partner in your due diligence i.e. verifying financials and helping build realistic projections.

Secondly I would call your local banks for financing. I know the offer accepted is based on all cash however you need to know if you can obtain financing. Also you are missing out on a lot of safeguards put in place by lenders with paying all cash. You need to underwrite the deal just like a bank would...with professional inspections, financial verifications, an appraisal, possibly an environment phase 1 study etc. Also find an experienced attorney and CPA (in CRE) that can help you through the transaction as well.

As @Jon Klaus pointed out it looks like you are spending a lot of your money on one deal. Make sure you have the proper reserves set in place for WHEN unexpected expenses come up the first two years. Good luck and keep us updated!