All Forum Posts by: James Sinclair

NEW CONSTRUCTION

(Building Site Evaluation)

Where to Build? That is the question. As part of our new construction meetings Lynn is going to lead us through her thoughts when evaluating a building site. Lynn does a lot of “scrape and builds” and finding the right location, at the right price, is a big part of the process. There may be a field trip involved, if a good example is found, so get ready to do a little walking.

For the remainder of this year our meetings will feature speakers that will talk about different aspects of New Construction. The October meeting of “Coffee Talk” will be Wednesday, October 14, 2015, at 10:00 a.m. in Lynn's conference room. Lynn's office is at 1107 S. 8th. St., Austin, TX, 78704. See you in the conference room.

Many thanks to Lynn for hosting our meeting.

To @Bill Gulley and @Brent Coombs and anyone else that wants to provide input I would like to know what laws make it ok for Real Estate Brokers to wholesale property.

1) They do not have a listing agreement with the property owner.

2) They do not have any other understanding with the owner to sell their property.

3) They do not own the property.

4) They have a purchase contract on the property just like every one else.

So your contention that the Brokers contract is a good contract and they can wholesale it and everyone else's contract is a sham contract and selling it is against the law just seems strange. 

Do your opinions all henge on the concept that the contract is some form of listing agreement and that instead of selling the rights to buy a property at a predetermined price they are just bringing a buyer and seller together for a commission.

I have not bought a property from a wholesaler but if presented with one that fits the definition of a good project would certainly look at it.  I know that the person that found it did a lot of work to uncover a viable project and that they need to be able to make a profit off the work that they have done.  I am not crying a lot of tears over the poor little financial institutions that may occasionally get a foreclosure messed up, they have dealt the rest of the world plenty of misery there will never be enough pay back for them.

To the recent Realtor/Broker posters that state that you need a license to sell real estate I would like some clarification on your statements.  I understand that brokers at one time tried to make it against the law for people to sell their own property.  It is my understanding that Realtors/Brokers job is to represent a seller or a buyer of a property that does not belong to them for an agreed upon fee.  They have a contract with the seller outlining that relationship.    If a broker is being a wholesaler (i.e. he/she has the property under contract to purchase) then the relationship to the owner and their property is different.  They are not representing the seller when presenting the property, they are representing their interest in the property.  I don't understand how a broker or realtor selling a property that they have a purchase contract on (not a brokerage contract in which you represent the owner) is in any different position than anyone else.

@Bill Gulley I am curious about your statement indicating properties are being taken off the market. Most of what I read about wholesaling indicates that people look for "off market" properties that need work to get them ready to list on the MLS. I am also wonder about the UCC stating that commerce requires holding title to property when most commodities are sold based on futures contracts and option contracts.

The biggest issue I have with wholesale deals is that they are just not good deals for me. The ARV is suspect, The discount from ARV is more like 80 to 85% instead of 70%, the cost to rehab looks like it is under estimated. This could be that the wholesaler just does not know but it could be that they are just looking for a sucker/investor that is too eager to get a deal.

Marketing to find a deal cost money and time and I am more interested in having options of recovering some of that cost if I find more deals that I want.  It seems like wholesaling it to another investor should be an option.  

jill I don't know why reply did not show up but the answer to your question is just getting information.  I like to understand what is in the water before jumping in.

Jill right now I am just doing "fix and flips" and am flexable on what I will do next.  I like to understand what is in the water before I jump in.  Wholesaleing a deal may be something I need to know about but I don't have a plan for it yet.  It seems to be a subject where there a lot of opinions but few proveable facts.

I have not wholesaled a house and finding one that would make a acceptable deal, for a buyer, is very difficult in our area.  I have done two fix and flips and they are a lot of work and a fair amount of risk as well. Selling a deal and making a profit, with little risk, could be a better option that doing the work.  

So is wholesaling against the law?  Does anyone really know?  Do we just have a bunch of realtors out there, that resent anyone doing anything that could possiably put money in their pocket, trying to scare off wholesalers?  Do you know of anyone selling their assignable contract being prosecuted for braking some law?  It appears that most of the negative comments about wholesaling seem to be efforts to protect realtors turf and little to do with protecting the public.  Is the real truth out there because there are a lot of people promoting wholesaling.

NEW CONSTRUCTION

For many of us looking at investments in real estate the idea of new construction periodically crosses our mind. Finding a good “fix and flip” and going through the mess of tearing out the old and putting in the new sometimes makes people think (What if I could do this from the ground up?). For the remainder of this year our meetings will feature speakers that will talk about different aspects of New Construction. The September meeting of “Coffee Talk” will be Wednesday, September 9, 2015, at 10:00 a.m. in Lynn's conference room. Lynn's office is at 1107 S. 8th. St., Austin, TX, 78704. See you in the conference room.

Many thanks to Lynn for hosting our meeting.

IT'S THE LAW

The law is everywhere in real estate investing and the more we know the better we are able to deal with it. Scott Smith an Austin Attorney knows the area and will share some of his knowledge in our August meeting of “Coffee Talk”. The August meeting will be Wednesday, August 12, 2015, at 10:00 a.m. in Lynn's conference room. Lynn's office is at 1107 S. 8th. St., Austin, TX, 78704. See you in the conference room.

Many thanks to Lynn for hosting our meeting.

Attorney Scott Royal Smith will provide a wealth of information including:

1. LIABILITY: where liability starts when buying and selling real property (it’s sooner than you think)
2. BUSINESS STRUCTURING: Stopping lawsuits before they start, Did you know real estate is the most litigated business, and a SINGLE lawsuit can wipe out the average investor? Scott Royal Smith will be “opening the kimono” and showing you the secrets that other attorneysdon’t want you to know. Following the presentation Scott will be giving you for FREE attorney drafted language!hey start with properly structured Trusts and Series LLC's
3. CONTRACTS: Making a sale truly “AS-IS” (hint: TREC form language doesn’t cut it). Scott will provide ACTUAL LANGUAGE to use in the CONTRACT and DEED!
4. ESTATE PLANNING: How to effortlessly pass wealth to your family while minimizing taxes, court costs, and attorney fees.

Scott Smith knows his stuff….

• Board Certified to practice in both Texas and New York
• Structures multimillion dollar investment deals and security agreements
• Has defended legal theories in the Appellate Courts in both Texas and New York
• Personally invests in real estate and notes.
• Will be featured contributor on BiggerPockets, one of the largest real estate investor web sites in the U.S.