All Forum Posts by: Walt Payne

@Vonetta Booker  I agree with the above advice. With REOs the longer days on market do indicate an opportunity that was not there early on, because if you time it right then you can get a good/great deal. And also as stated, disregard the asking price. But at the same time don't be too greedy in what you offer. Just go a reasonable amount below the number that can work, to leave room to negotiate. I have had offers accepted at way below asking under the right circumstances. Like a vandalism (disclosed) that dropped the value but others had not seen the change in description. With REOs it is as much a matter of luck as it is skill. Good luck!

@Kyle M.  as @Mike M. said, 50K minimum if you hire the job out and everything goes well. You could cut that in half if you did most of the work yourself, but that is a huge job.

You could possibly do the demo work yourself to cut those costs a bit. I also was thinking that if you could it would be good to slip a 1/2 bath in there. It might not increase rents a lot but would make it more desirable which would help with vacancies.

@Jeremy Hale  brutally honest? OK, stop dreaming. Basing value on listed properties is just tying your dreams to theirs. They have not sold at that price. That is asking price.

Think about it, if this house is on the MLS, do you think it would still be available if it is a good buy?

Your repair costs are not any more accurate, based on what you said. It is great that you want to jump in and do something. But there are two opposite trends that I have seen. The first is what everyone here calls "paralysis by analysis" which is to become overly involved with details and making sure you know everything, so in the end you do nothing. And the equally fatal opposite is jumping in without knowing how deep the water might be. You have more cash to get started than most. Learn how to use it wisely and you will be well on your way.

Make contacts, listen to the podcasts here, learn, gain knowledge, then jump in. I would highly recommend J. Scott's ebook The Book on Flipping Houses , it is a great resource.

Good luck!

@Kyle M. just from the pics I would call it a total gut job needing a new roof, and sidewalk and who knows what else. What kind of neighborhood? Lots of work in that one. Might be worth it if that $1400 is valid, but it is not going to be easy and not a high CoC return.

 Bad move. You are more likely to have a potential buyer look and figure it is too far gone.

True. Not only that, but if there is a lawsuit, the suit is filed in the state where the incident happened, and tried under their laws. This means that even if DE law made it 100% impossible to pierce the corporate veil, the state where the suit is tried does not have to respect that aspect of DE laws. So creating a LLC in another state does not provide any additional liability protection. This is especially an issue with series LLC laws because they are new and relatively little case law has been developed concerning them. There is no telling what reasons a court might use to even disregard the separation of entities provided by a series LLC. Especially if that state does not even have series LLCs under their laws.

@Ryan Dossey  

If you approach someone who has lived in a house for thirty years who heard of the RE crash and thinks their property is not worth much and you play on that to get a lower price then you might be on the border of theft, morally if not legally. That is my take on it.

I think it comes down to "informed decisions". Does the seller know the actual value of the property? If you start with a real ARV and discuss costs and the fact that you are in the business to make a profit, then any price you negotiate on both sides of the deal is reasonable. It can and does work if you have an honest discussion about things like not having to pay realtor commissions, that they do not need to invest any time or money in repairs, that you can pay cash, that there will be no contingencies that would cause the deal to fall through and in fact you can have closing as soon as they are ready. All of those things will help you bring the price down to where you need it to be for a profit, while being honest and up front with a seller.

The other part of that is knowing their motivator. If they are in a "must sell" situation, they are likely to take a lower price, and the more critical that motivator, the lower the price they will take. But again, if it is an informed decision and you are making that issue that motivates them go away, then you are not in the wrong if you walk them through the deal and they decide it is worth it.

Once you have a marketable deal, from there your commission is determined by what your buyers will pay. If you can make $10k and they are happy with your price, as long as you obtained the deal honestly then by all means charge that, you will have earned it.

Well, now you have an offer from one of the best to help you! Go do it!

If you have a good deal, it would sell on BP, for one thing. I am not talking about something that you found on MLS like many supposed wholesalers try to market. I am talking an off market buy that has profit in it for everyone involved. Yes, you can get "a home" very easily, but getting a deal is not so easy. That is exactly the thing that many on here criticize about the majority of self proclaimed wholesalers. If you are partnering with another real wholesaler, they should have buyers already.

Know what a deal is, and when you present it to even a small group of investors one of them will find a way to buy it, even if they don't have the money right now. 

@Account Closed  There is nothing wrong with it ... until there is. When they intentionally avoid potential offers at the expense of the seller, they are essentially stealing from the seller to benefit themselves. That is when it becomes wrong.