All Forum Posts by: Lou Castillo

Whew...OK...let's tackle all these questions.

First..it is ALWAYS a good idea to review everything with an attorney. Everyone here is giving you their opinion based on  experience. Only an attorney is qualified to speak about the law. 

As for the LLC - not required at first, but here is what you lose. 1) The LLC protects your assets in the event of a lawsuit and (2) there can be some great tax advantages. I think it is worth the investment of time and money if you can swing it.

Your brand name can be the same as your corporate name (in which case you should start with the brand and make the corporate name the brand name). The brand should be something that customers can easily understand and relate to. Your brand should be on ALL of your marketing.

If you do not set up a corp initially, then you could just set up a separate personal bank account. Once you have your corp set up, then open a business bank account. Remember to never co-mingle personal and corporate funds/bills. It could provide a basis to pierce your corporate veil.

For wholesaling you need a simple Purchase & Sales Agreement. Make sure it is Assignable. It just needs to say "This Agreement is Assignable by the Buyer".

You will also need a simple Assignment of Contract.

I have never reviewed the contracts available on BP so I have no opinion.

As for email addresses - don't get too hung up on the small stuff. It is always more professional to have an address that matches your brand, but at first, any email is fine.

What I tell my clients is: let's create the problem first - in other words, let's start making money, they we'll sweat the small stuff.

I hope that helps. Good luck to you!

What part of town do you live in? Gwinnett - especially around Indian Trail - Jimmy Carter...even parts of Lawrenceville have some great easy rehab props. I would look for areas where the houses are 20-30 years old and the subdivisions are tired.

Decatur/East Lake / East ATL have been very good areas as well.

Welcome to BP and to a very exciting and profitable business. I wish you much success. Let me know if I can help you.

What Wholesalers are looking for is assurance that you are going to close. Typically they have a house under contract for just 30 days and have already used some of that advertising the property. They need you to close prior to the expiration of their contract.

Non-refundable earnest money is typical if YOU don't perform. If they or the Seller do not perform, then the money should be refundable.

I typically ask for $2,000 non-refundable and close in 2-3 weeks depending on how much time I have available and the buyers source of funding. I would ask to have an attorney or title company hold that large of an earnest money deposit and not give it directly to the wholesaler. I have no problem with a buyer wanting to do that (as long as it is MY attorney holding the funds.

If your credit is good (740+) then you can also get an unsecured business loan. Write to me at [email protected] and I'll give you the name of a commercial loan broker I really trust.

The seller is asking not to sign the PSA until closing so that they are not committed to your offer. They can continue to shop it and if they find a better offer they will take it. You will also have problems with your buyers because you can not guarantee them that the seller will close - there is no contract.

Think about this...what is to stop any prospect you bring to the house from contacting the seller and making a slightly higher offer and wiping you out of the deal?

Further - you have nothing to sell. You don't own the house, so you can not sell that. And you do not have a contract, so you can not sell your interest. Although unlikely, you could even get yourself in trouble with the Board of Realtors for acting like an Agent trying to find a buyer for the seller.

My recommendation would be to play hard ball and be willing to walk away if the Seller won't sign a PSA.

Congratulations!

I also like Real Quest and SiteXData. Court House Retrieval System is good, but is limited in its coverage

First, it is deciding what is your exit strategy. Sounds like you want to renovate and re-sell - correct?

I look at direct mail as a marketing/acquisition strategy and subject to/owner financing and private lenders/partners as financing strategies. My approach is to market to motivated sellers - find a good deal, and them employ the best strategy to create a profitable deal.

So as a definitive answer to your question, your best results will come from marketing to motivated sellers and you should line up financing so when a good deal presents itself, you can close.

We would all need more data to help you. Here are the things to consider:

After Repair Value of the home

Renovations required (cost)

Fair Market Rents

Property Taxes

Costs of the homes so you can calculate cash flow