All Forum Posts by: Derek W.

Andrew, I have read other posts from you, and see this is something you are struggling with. I am an investor AND a Realtor. I am also a licensed contractor. Maybe I just like having important looking cards in my wallet, but I think each of these helps with my over-all real estate investing. I work in an office with over 250 agents. I agree that most of the agents do not understand investing. In fact, when I teach classes on how to be a better agent for investors, no one shows up! They don’t care. They should be the ones that snatch up the best deals for themselves, but seem content to safely earn a commission selling these deals to someone else to make the big bucks and take the big risk. There are some who get this distinction, but most don’t. It is really about being risk-averse. Selling real estate has very little risk, and a small reward. Buying real estate has a much larger risk, with a much larger potential reward. Real estate investing isn’t for the weak of heart or the risk-averse personalities. So let’s not confuse real estate agents who know a little about investing with investors who also have a real estate license.
As far as disclosures, this is so simply it isn’t even a point worth discussing. You need to let all parties with whom you are entering into a contract know that you are an agent. That’s it. When you talk to someone on the phone you say “by the way, I am a licensed real estate agent, just wanted to make sure you knew that.†When signing contracts you add a sentence that says something like “Andrew is a real estate agent and a party to the transaction…†You have also probably been told that agents have more liability than a non agent. What does that mean? If you don’t have a real estate license you can act unethically and screw people without recourse? I don’t see the disadvantage of having a license. Treat everyone fairly like you would want to be treated. Don’t lie or deceive anyone for the sake of money. Be fair and honest. Do you need a real estate license to make you do business this way? I hope not.
I know a lot of very successful investor who are either agents or brokers. In California it is getting very helpful to have your license as access to the mls is so restricted now with safe keys. I can search for all of my own properties, call the agents for additional information and tips, write my own offers, and collect a commission when I buy and sell my own properties. So as an agent, access to the largest single data base of deals is right at my finger tips. This is vital as an investor in Southern California for the next number of years. Our deals are coming from REO auctions, and straight out of the MLS. In other market cycles, it may not be as necessary to have a license, as you are dealing with mailers and direct with homeowners where people’s negative perception of agent disclosure comes from. But right now it seems crucial to have direct access to the mls. I don’t have to rely on anyone else to search as long and hard as I want to for the next deal.
Maybe it is a perception thing? A used car salesman sells used cars. A Realtor sells used houses. I think you may be hung up on the idea of a “REALTOR.†You want to invest and do amazing transactions, but a realtor just seems like a salesman, right? You don’t have to work in a big office and wear shirts and ties, and sit open houses and gather “leads†if you don’t want to. Find a broker that will you “park’ your license if that is what you desire. That is the beauty about this business. You can work in your own home in your dirty shorts and favorite beer t-shirt if you want.
But as a Realtor, you can still search for property, do the thing you love, and get a pay check when you are in between deals. I buy houses for my own rehab and retail projects, and sell them to other investors and homeowners. I sell more to investors than homeowners simply because I search for the type on inventory investor are looking for. The average homeowner doesn’t want a bank owned house that has had the copper stripped, poo in the dry toilet, and graffiti on all surfaces.
Feel free to pm me if you want more info on license requirements, brokers, real estate mentors, education etc. I like your enthusiasm and want you to make the decision that you feel is best for you based on what you really want. What works for some of us on here, may not be right for everyone.

WE (as knowledgeable investors) can always do better. The general public usually cannot. I am shocked at how many people don't care about price, or don't know about price. They only care about monthly affordability. I have had a few equity share properties and can say from experience people ARE willing to pay more than market value if they cannot qualify for a loan. I had a property in San Jacinto, CA that had a comp value of 190- 200k. The owner was upside down at that value, but I was able to find people willing to agree on a mutually agreed value of 235k for purposes of an equity share because the 30 year fixed mortgage had monthly payments they could afford. They have 7 years to refinance the property and cash out the mortgage holder, so they are gambling that prices will be back up in 7 years so the property will appraise for 235k and they will clean up their credit so they can qualify for a loan. In the mean time they have a home they can live in without dealing with a land lord and have monthly payments paying down the mortgage and (hopefully) building equity. Some peoples credit problems are way beyond a 6-12 month clean up.

Ooops, I posted a response not seeing page two of the thread, now that I have read page two, my questions has been answered.

If I understand the question, according to your scenario there are two ways that come to mind that I would use to sell the house in your example. One would be a short sale. You said you are an agent, so you would profit the commission of the sale as a listing agent. Or you could do an Equity Holding trust or lease option (lots of info on these in other threads) and market the existing financing to those that may have trouble qualifying for a loan. If the property is only slightly upside down, like in your example, and the area isn’t drastically depreciating, like Inland Empire, California, then the existing financing is the attractive part of the deal. People will pay a little more than market value if they can take over existing financing without lender qualifying. Seller gets out of the property with credit intact, and you make a fee for the deal. So you are onto the right idea. Just research the best way to put the deal together to make it the least risky. These are done all the time.

Unfortunately I am down with the flu. So I didn’t get to one of my “flips†to check to see if the painter ever showed up. But it shouldn’t matter, right? The government will make sure that it is still on the market completely renovated Jan. 1, right? I will still get paid, huh?
Amazing!

I attended Bill Gatten's seminar a few years back. I was "impressed" (puzzled) with how complicated a possibly better version of a lease option was presented. It just didn't seem to work in the current softening market of California at the time, and certainly wouldn't work now that my area has lost 48-50% in value. I don't want to assume those loans! But when optioning properties becomes viable again, like it will in the next few years, I plan to set up some trusts instead of lease options for the added legal protection it offers.

I had the pleasure of meeting Rick Villani and Clay Davis in 2007. I was considering becoming a Home Fixer affiliate after I had a brilliant idea, Googled it to see if anyone else had it, and saw their names all over my idea! Two of the nicest, most helpfull, and sincere guys I have ever met. They had some conferences to teach the book's concepts more in depth. Don't know if they still do or not.

I second Caitlyn's motion. Yes, please! Share! Could we hear how you did that?

I would never use the word “absolutely†when dealing with lenders. I would lose that bet everytime! LOL
I see them refuse 10’s of thousand of dollars all the time. It drives me nuts. But that is why we in my office just have to mutter “can’t fix stupid.†And they don’t seem to care if it is a cash offer or not most of the time, as the transaction is not up to them, only the approval of the amount. In an REO transaction, different story. A cash offer is much more powerful as the lender is now the one in charge of the transaction and will have monetary interest in whether or not the deal closes. I am just not seeing that in loss mitigation. They just want to see if it meets or exceeds their valuation of market value, and if all of the paper work is complete so they can check their little boxes on the check list and pass it down the line. I suppose since I am a Realtor I have never had to try to negotiate around their requirement of having a Listing Agreement. I just provide them one and everyone is happy. Some lenders have as part of the requirements of their “complete short pay package†that you send in a listing agreement. If you are successful in negotiating around this, I believe you. Like I said earlier, it sounds like you have a talent for the negotiating. Good job.
Oh, and I talked to a guy at Country Wide last week and he confirmed my worst suspicion…that he is using Zillow and Trulia to get his “value!†Scary.

With a competent realtor, I think the most important factor for a successful short sale is the home owner. An owner who is really motivated to doing everything needed to complete a short sale will increase the odds of a sale ten fold from the seller who is unmotivated and just going through the motions. (Believe me, I’ve had those! No time is ever good to show the property. After 3 weeks I still don’t have complete financial paper work etc.) Making the home easy to show, keeping it clean, tidy and presentable, and working in a timely manner with your agent to provide the lender the required documents for a short sale will definitely help your case. In Riverside County, California almost our ENTIRE inventory is a foreclosure or pre-foreclosure, so we are competing with bank owned properties which are vacant and easy to show. There needs to be a real motivation by a buyer to want to purchase a short sale home, which will likely take 30-60 even 90 days longer than purchasing a bank owned home, and may fall apart after waiting all this time anyway. This may not be true in other areas with different types of inventory. But I always advertise that my short sales are “Better than an REO!!! You get a green lawn and full disclosures and full title insurance!†The lenders are refusing to provide any disclosure forms as they have never lived in the property and won’t be liable for any problems the new owner may find after moving in. We are also seeing recently that they are only providing a very basic title policy that does not protect against any liens or fines that may be assessed against the property and not discovered in a basic title search. Read the fine print of every REO purchase! They are starting to slip in some doozies! To much coffee this morning and I am rambling...sorry.