All Forum Posts by: Tom Gimer

Quote from @Tom Gimer:

Quote from @Tim Silvers:

Quote from @Tom Gimer:

The fact pattern states the equipment was leased (owned by the solar company, not the property owner). That’s crucial. 

The solar equipment destroyed, there is nothing for the lender to remove. The lease is now unsecured debt… not a junior lien on the land.

So, the UCC-1 is now an unsecured debt against the decedent's estate, I assume?
Wood tile need in order to reconvey since the lien still shows up?
 

The unpaid lease may lead to a claim against the estate of the decedent but it’s not a title issue, IMO. 

Again, this is if the equipment was in fact leased. If purchased with financing and the security interest represented by the UCC was timely perfected, I would have a completely different opinion.

It is actually a loan, however, the panels are not attached to the property as is stated in the agreement:

"Personal Property. You and we both expressly intend that no portion of the Collateralized Goods will constitute a “fixture” attached to any real property, and that the Collateralized Goods will be removable personal property. You also agree not to take any action that might cause the Collateralized Goods to be treated as real property or as fixtures to real property. You agree that we may make a fixture filing, if we choose, provided that you and we agree that we may enforce rights in the Collateralized Goods under the Uniform Commercial Code and not under state real estate or mortgage law."

@Jonathan Greene “Huh? You think it's odd that a fiduciary duty would apply to someone who calls a person or markets to them to buy their house, tells them how they are going to buy it (or assign it), puts down a deposit on it, brings in other people to show said person's house, and then executes a deal with a third party where they get paid?

I think what you said is more odd and the exact reason why laws against wholesaling are being put in place all over.”

If the person in question were the REAL buyer, no question of fiduciary responsibility exists; the buyer is merely a PRINCIPAL in the transaction, and as such has no duty to the seller.    The question of fidelity, honesty, disclosure and or fiduciary exists BECAUSE the person in question (wholesaler) is NOT the real buyer.  So, states are beginning to look at the “role” of the wholesaler two ways.  First, if the wholesaler is a PRINCIPAL in the transaction, then if he signs a contract stating he will purchase the property but has NO INTENT to close, merely wants to flip the contract, that is arguably fraud.  The other way some states are looking at the role of wholesaler is that the wholesaler is NOT a principal to the transaction; i.e., he is an intermediary.  As an intermediary he is subject to the laws, rules and regulations regarding real estate broker activities in the state in question.  

Quote from @Tom Gimer:

Quote from @Jonathan Greene:

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Chris Williams:

Quote from @Account Closed:

Not too hard for someone who reads and understand plain English, which is what it takes to understand the law. Or, if one can't read and comprehend it, pay $300 to an attorney and let them explain it to you. As long as wholesaling is legal it shouldn't be hard to do it while complying with the law. If they ban it, then court challenges are likely and how it will settle is to be seen. 

 Just get your license bro it is a few hundred dollars. It won't kill you. Sadly real estate costs money. Just follow the rules. You a sole investor are not going to overule a ruling made by legislators. 

I wrote earlier that if wholesaling works out for me in MD (I will have at least 1 year to try it and see where it goes) , I will get a REA license. It takes 60 hours class, an exam and sponsorship from local REA. I just don't see how adding bureaucracy , burden of state and board regulations and adding costs to each transaction will benefit the business. After all this is not retail business, it's mean to find and supply cheap properties to investors many of whom rely on HML to finance the project. Someone will pay for this and it will be sellers who will get less for their property and retail buyers who will pay more for after repair house. And all this could be handled with existing laws in the books.

Eric.

there are a lot of occupations that require license

Plumbing
electrical
mechanical
Architect
engineer
Pilot
doctor
Lawyer
Dentist

and on and on.. I I learned how to fly years ago in about 10 hours I soloed.. but I was not licensed I had a student license after passing physical but you still needed to take the big test and a flight test to be legal and get your wings.

Real estate for most folks is their most important or biggest financial asset they have or will have and now you have all these unlicensed yahoos running around with little to no education many with very suspect morals etc .. trying to bring buyer and seller together for compensation.. Its Nuts to allow this..

Jay, I will give you that there are a lot of yahoos who do stupid and criminal things. I am for one against it. It's bad for business. It's one thing if you want to screw over someone , steal $10K and disappear into thin air. It's another if you look at it as a sustainable source of income, which what business is. Those yahoos, when they do egregious things, spoil it for everyone and should be caught and prosecuted for crimes they engage in. I am not the one to advocate for nuts and morons. 

As to licensing, professions you listed are all catering to public in some way. Wholesalers don't. Although wholesalers source their product from general population (home owners), they actually cater to investors. Investors are business owners who have to know what they are doing and accept the risks for doing a business for profit. Hence I don't see need for a REA license.

When it comes to sellers, no one stops seller from listing their property with REA or getting it sold through a broker. It's their choice, as adults, to sell it for cash and off the market. And we already have MD Loss Mitigation laws in place which protect most vulnerable, those who are 60+ days past due on the mortgage. Why should State interfere with it any further, increasing the cost of transaction while doing so? We already have MLS where sellers can have REA list their properties and try to get most cash using brokers and REA. Who prevents sellers from doing it?

This is a ludicrous statement - "Although wholesalers source their product from general population (home owners), they actually cater to investors."

Most sellers believe they are engaging in an arm's length transaction with a buyer, not a wholesaler. The seller is the client and if you are transacting real estate business, most courts would likely decide, at some point, that a fiduciary duty is owed which is why states are cracking down on it.

If you are catering to investors, that is the problem. You can't cater to investors and also help the seller who is the person you are contacting first and placing their house "under contract" for you to buy, or in small print, assign.

Odd for an attorney to make the claim that a contract purchaser has/should have a fiduciary duty to a seller. 

The seller is most definitely not the client. And yes, in my experience most wholesalers are basically just bird-dogging for investors who don't want to deal with finding properties. As has been noted in recent wholesaling threads (perhaps even this one), the marketing that produces off-market seller leads can cost many, many thousands of dollars per month.

Huh? You think it's odd that a fiduciary duty would apply to someone who calls a person or markets to them to buy their house, tells them how they are going to buy it (or assign it), puts down a deposit on it, brings in other people to show said person's house, and then executes a deal with a third party where they get paid?

I think what you said is more odd and the exact reason why laws against wholesaling are being put in place all over.

Quote from @Kris Villasenor:

As part of my investing journey, I'm now on quite a few wholesaler lists and receive off-market deals almost daily.

On properties I'm interested in, I'll get into the research on the property and then run numbers (working hard to develop these skills), and then I'll notice that some of these deals aren't deals.

For example a property is being wholesaled for 120k, but was last bought in 2022 for 60k, it needs a ton of work (30k est), it's vacant, and they say'll it'll ARV at 180k and the neighborhood comps (both nearby sold properties and even rents actually) do not support that ARV. It won't cash flow, and it's like the wholesaler wants the appreciation before it, you know, appreciates.

It feels like some wholesalers are hyping up properties to out of state investors (of which I am one) and they are banking on us not doing even the basic amount of calculations.

I wouldn't touch quite a few of these wholesale "deals", and am wondering what the purpose of wholesaling is actually. Is there something I'm missing?

Kris congratulations, seriously, you are passing the test! The test where one uses there head for more then a neck weight or hat holder.

Your spot-on. 

Thing is, once upon a time wholesalers engaged in there place, and were happy to do so. They were a conduit for the "deal" and many were proud of such. 

That creature is all but extinct. 

And like some body-snacher flick this parasite has taken over the "wholesaler" space all but totally, zombified creature feeding on your capital vs brains although they do consume a considerable amount of ones patience as well. 

They argue there existence is just, taking people for every cent regardless of viability int he "deal" just, because they could, because people allow them to do so. 

The honor in the craft is all but completely gone. 

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Chris Williams:

Quote from @Account Closed:

Not too hard for someone who reads and understand plain English, which is what it takes to understand the law. Or, if one can't read and comprehend it, pay $300 to an attorney and let them explain it to you. As long as wholesaling is legal it shouldn't be hard to do it while complying with the law. If they ban it, then court challenges are likely and how it will settle is to be seen. 

 Just get your license bro it is a few hundred dollars. It won't kill you. Sadly real estate costs money. Just follow the rules. You a sole investor are not going to overule a ruling made by legislators. 

I wrote earlier that if wholesaling works out for me in MD (I will have at least 1 year to try it and see where it goes) , I will get a REA license. It takes 60 hours class, an exam and sponsorship from local REA. I just don't see how adding bureaucracy , burden of state and board regulations and adding costs to each transaction will benefit the business. After all this is not retail business, it's mean to find and supply cheap properties to investors many of whom rely on HML to finance the project. Someone will pay for this and it will be sellers who will get less for their property and retail buyers who will pay more for after repair house. And all this could be handled with existing laws in the books.

Eric.

there are a lot of occupations that require license

Plumbing
electrical
mechanical
Architect
engineer
Pilot
doctor
Lawyer
Dentist

and on and on.. I I learned how to fly years ago in about 10 hours I soloed.. but I was not licensed I had a student license after passing physical but you still needed to take the big test and a flight test to be legal and get your wings.

Real estate for most folks is their most important or biggest financial asset they have or will have and now you have all these unlicensed yahoos running around with little to no education many with very suspect morals etc .. trying to bring buyer and seller together for compensation.. Its Nuts to allow this..

Jay, I will give you that there are a lot of yahoos who do stupid and criminal things. I am for one against it. It's bad for business. It's one thing if you want to screw over someone , steal $10K and disappear into thin air. It's another if you look at it as a sustainable source of income, which what business is. Those yahoos, when they do egregious things, spoil it for everyone and should be caught and prosecuted for crimes they engage in. I am not the one to advocate for nuts and morons. 

As to licensing, professions you listed are all catering to public in some way. Wholesalers don't. Although wholesalers source their product from general population (home owners), they actually cater to investors. Investors are business owners who have to know what they are doing and accept the risks for doing a business for profit. Hence I don't see need for a REA license.

When it comes to sellers, no one stops seller from listing their property with REA or getting it sold through a broker. It's their choice, as adults, to sell it for cash and off the market. And we already have MD Loss Mitigation laws in place which protect most vulnerable, those who are 60+ days past due on the mortgage. Why should State interfere with it any further, increasing the cost of transaction while doing so? We already have MLS where sellers can have REA list their properties and try to get most cash using brokers and REA. Who prevents sellers from doing it?

This is a ludicrous statement - "Although wholesalers source their product from general population (home owners), they actually cater to investors."

Most sellers believe they are engaging in an arm's length transaction with a buyer, not a wholesaler. The seller is the client and if you are transacting real estate business, most courts would likely decide, at some point, that a fiduciary duty is owed which is why states are cracking down on it.

If you are catering to investors, that is the problem. You can't cater to investors and also help the seller who is the person you are contacting first and placing their house "under contract" for you to buy, or in small print, assign.

Quote from @Tom Gimer:

The fact pattern states the equipment was leased (owned by the solar company, not the property owner). That’s crucial. 

The solar equipment destroyed, there is nothing for the lender to remove. The lease is now unsecured debt… not a junior lien on the land.

So, the UCC-1 is now an unsecured debt against the decedent's estate, I assume?
Wood tile need in order to reconvey since the lien still shows up?
 

Quote from @Tom Gimer:

Based upon the tax certificate issued and relied upon at settlement, I would be requesting that the taxing authority abate the liens against the property and pursue the seller directly for the amounts now claimed to be owed.

 I called the taxing authority and they said NO. Per them it is standard practice to be aware that exemptions would be removed at certain point and back taxes will be charged. They said current owner is responsible even though they were for previous owner

Quote from @Tom Gimer:

Quote from @Account Closed:

Great advise, thank you @Tom Gimer 

I spoke with some wholesalers who were able to get good properties under contract, but couldn't find serious cash buyer. It certainly makes sense to CLOSE on those and keep (to resell, rehab and etc.). 

Do you know what worked best for them when they just started? There are so many different options and big guys will advise to spend $5000-$25000 per month on marketing to get a steady stream of leads that can close deals. But what you do when you just start out, with lots of options out there (that come with risks to burn a lot of cash really fast, when you shouldn't do it)? Being too cheap also may back fire if you end up making 10,000 calls by pulling a list from Propstreams and never closing a single deal in the end.

 Any advise on best marketing strategies for starters, on "starting lean and mean" under current market conditions in Maryland, would be greatly appreciated!

Cart before horse.

You need to network first, then get deals. Find out who buys in which neighborhoods and at what price points. Also the extent of rehab required. At first you will have to share/JV because the end buyer will be somebody else's contact. Before long you'll know a bunch of the local players and won't need to share unless you have trouble selling to your list... and then it will continue to grow.

Always happy to share and go JV if that's what gets deal done. I am networking too. I am curious though: if you locate a good property, and by good I mean (as an example) 3br 2 ba SFH, in a hot zip code, with plenty of comps to figure ARV, at 70% of ARV minus well estimated repair costs and reasonable assignment fee, and then offer it as is to investors in current market, how difficult would it be to sell it if your trusted/connected buyers didn't want to buy it? It's possible to find a great deal, but not where my buyer wants specifically wants to buy, not matching no. of br and ba he wants to have and etc.? Should I avoid getting such property under contract, even if it's a great investment opportunity that HML would be willing to finance if I wanted to rehab it? Are buyers/investors picky and particular about what exact parameters house falls under, regardless of how good of an investment it is based on verifiable (not inflated) numbers and metrics from data sources?

Great advise, thank you @Tom Gimer 

I spoke with some wholesalers who were able to get good properties under contract, but couldn't find serious cash buyer. It certainly makes sense to CLOSE on those and keep (to resell, rehab and etc.). 

Do you know what worked best for them when they just started? There are so many different options and big guys will advise to spend $5000-$25000 per month on marketing to get a steady stream of leads that can close deals. But what you do when you just start out, with lots of options out there (that come with risks to burn a lot of cash really fast, when you shouldn't do it)? Being too cheap also may back fire if you end up making 10,000 calls by pulling a list from Propstreams and never closing a single deal in the end.

 Any advise on best marketing strategies for starters, on "starting lean and mean" under current market conditions in Maryland, would be greatly appreciated!