All Forum Posts by: Robert Solis

Thanks @Wendell De Guzman! Can you clarify for me... do these closing costs refer to the closing costs incurred when the rehabber acquires the property or when the rehabber sells the property or both?

@Wendell De Guzman thanks so much for this thread. :-)

Can I ask you some estimating questions?

How are you estimating your Closing cost to Buy and Closing Cost to Sell? Are you using a rule of thumb such as "multiply purchase cost by a percent"?

Am I right in understanding that Closing Cost to Buy refers to your closing costs when you acquire the property and Closing Cost to Sell refers to the closing costs when you sell after the rehab has been completed?

Hi guys!

It seems to me that there can be a lot of quibbling over what this means exactly. I see this phrase in wholesale advertisements all the time.

I think that when an end buyer buys from a wholesaler, it is understood that the buyer pays the closing costs. However, are there fees that are not considered "closing costs"? 

Are real estate comissions considered a closing cost? 

Are Attorney fees considered a closing cost?

How about Pro-rated taxes?

What is the standard for wholesale deals? In other words, are there fees that the seller still has to pay? I'd hate to pitch "no out-of-pocket money from you to sell your house because we pay your closing costs" and then at closing, the seller finds out he has to pay some fee. Just want to be clear on what the seller still has to pay at closing.

Thanks for your thoughts in advance!

Thanks @Jerry W.

Going with the simple memo and handshake idea... who cuts the check? Is that memo given to the title company and the title company cuts a check for each of you? or after original wholesaler receives the assignment fee, he gives you a check for your half?

I'd like to joint venture with other wholesalers in my area but I'm not familiar with the kind of contract that's used in this situation. 

The two scenarios I'm talking about are:

1. I find a cash buyer for another wholesaler

2. Another wholesaler finds a cash buyer for me

All we would do is split the assignment fee 50-50.

For those of you who have done similar joint ventures...What did you use for the written contract?

Thanks guys!

@Marcus Kennedy

I can totally empathize with what you're going through. That was my experience too.

@Chaz Reid is spot on regarding motivation. You want to spend most of your phone time with motivated people. Minimize time-wasters.

What helped me was visualizing the lead-to-close process as a sales funnel. At the top you have a wide range of people with varying motivations and ultimately you want to shrink the funnel so you filter out the un-motivated.

I like to make people leave messages before I call them back. The act of leaving a message is a sign of motivation to me. So that's the first filter.

My next filter is at the beginning of my call back when I tell them right off the bat that what I'm looking for is a house that needs work and I ask them if their house fits that description. That weeds out people who want me to pay top dollar because they want me to think their house is in perfect condition.

At some point during rapport building, I'll ask them what they think their house is worth and how they arrived at that number. Then I'll ask them what they would like to get for it.

Anytime I talk with someone who just wants a price, I tell them the lowest comp. "I'm on the MLS and it looks to me like houses in your neighborhood are selling for ."

If you're still getting overwhelmed by phone calls, you can experiment your direct mail copy. 

"I want to buy your house" is a lot broader than "I want to buy your house if you are in this situation".

Hope that helps!

My favorite Chicago meetups are:

Chicago Area Real Estate Investors Association

RedevelopU

Northern Illinois Real Estate Investment Association

Chicago Creative Investors Association

Hope that helps and maybe I'll see you at one meetup. :-)

I think I understand now. 

Example:

House under contract for $100,000.

Your assignment fee is $10,000.

Agent fee is $5000.

1. You tell agent the net price to you is $110,000 and to add his fee on top of that.

2. Agent finds cash buyer to purchase house at $115,000.

3. Prior to closing, agent submits to you a commission statement that specifies $5000 as his commission.

4. You pass this on to the title company.

5. Title company adds this to the HUD so a check is cut for the agent at closing.

Thanks @Wendell De Guzman! That chart clarified things for me. 

Hi Wendell! I've seen you categorizing neighborhoods as "B" or "C"... How do you determine which letter to assign? Is there data on the MLS somewhere? Or is this something you do proprietarily? --Robert