Does the seller need to know what you are doing?
Or, for example, do you approach the seller as if you are the buyer, put it under contract (with your investor on the other end agreed to buy at your terms), and then just do a double close, and the seller is none the wiser?
Haha, I have to admit that I’m not completely truthful with my sellers, I come off as the end buyer, and when it comes time to close escrow they see a different name on the paperwork, many have asked, I thought you were buying it, I reply, I am, the end buyer is my partner. That usually satisfies them.
But most of the time, sellers don’t ask and I don’t tell that I’m wholesaling their property. I do have it in my contract that seller acknowledges that I am using my marketing, time and money and or negotiating skills and that I deserve to profit on this transaction.
Sometimes they ask what do I intend to do with the house, I tell them I’m not sure if my partner will keep it as a rental or rehab it and resale it.
I’m sure many sellers wud be OK with me wholesaling their house, and some may not, but as long as I get them the price we agreed on, why tell them? It’s all good.
I’m going to have to read some of that book again. Fun stuff to wrap your mind around. So with a double close you have two contracts, one between you and seller, and you and buyer. I suppose it doesn’t matter what order you close them in, as long as it is the same day? I’m going to have to study this a little more for sure. I’ve been in real estate for a while but this is still some tricky stuff to figure out.
In this world especially in real estate, you dont need to tell everything, white lies are important sometimes to earn profits.
Never tell a realtor your going to wholesale their house, or you need to get financing. Remember, You have cash and will close in 30 days or less. Be prepared to show a proof of funds letter and fill out their 20 page contract & a $1,000 deposit.
They think wholesaling re is illegal. And be prepared for their know it all attitude, and realize they have to be in charge. They don’t want you negotiating directly with the seller, even though they will still get their commission and you can usually get a much better price.
Don’t be worried about telling a realtor where to stick it, they are as thick as thieves, and a dime a dozen, and as abundant as fleas on a mangy dog. They will promise you everything and deliver nothing, you must acknowledge their superiority or they will be crushed.
These people are to be avoided unless it’s absolutely necessary.
But besides all that, you might find a few that are not too obnoxious and even likable, but def not trustworthy.
Maybe it’s understandable though, if we only made 3% commission on deals we might be hating investors also.
Can you tell I’ve had bad experiences with these dipwads?
But most of the time we got better things to do than deal with these creatures,
Let’s make some Money…
Rando
:beer
That generally gets covered during negotiation of price. I explain I’m an investor and no profit equals no paycheck so I need to be careful what I pay for a property or I could do the project and even do worse then no profit. Which is not the kind of news my wife wants to hear. Let me explain how I work. at this point I cover partners, other investors, hidden expenses, holding costs and that I basically have a unofficial team working with me. And there are times I find a buyer willing to risk more then I should and I will sell him my contract or we will partner.
Sometimes a seller will see we got a great final price when we sell but they don’t see how much time and money was expended, or the headaches we ran into with the city or the county or another dozen people that are good at creating headaches. They think any amount they got and what the sales price we got is pure profit. I tell them even the IRS is not that stupid or greedy but I used to offer them an out, you guarantee us a profit of x dollars and you can keep any profits above that. Only one couple took me up on that and their timing was rotten. It was Memorial Day 1989 and the S.F.Bay market Istarted into a nose
dive, and we were just finishing up and getting ready to place it on the market.
I told them you are now about to experience a falling knife market and they said what is that so I said you don’t price at today’s price, you need to price at tomorrows price, not where the falling knife is, but where it is going to be if you want to catch it…
f.
bay
We do try to be honest. We disclose it. We simply tell them that we will either buy the house in cash or we may assign it to an other cash buyer. We simply do not sign contracts we don’t intent to buy ourselves. When we come across a house that is just a no deal, we will flat out tell them that we offer an other option. “We will not buy the house but we can market the house to our list of cash buyers”. We simply explain they have nothing to lose and it can only help their chances to get the property sold.
Keep in mind, what is a white lie to you is a flat out dishonest lie to them. To make it in this business you have to stand out from the rest. The rest usually are dishonest, greedy and selfish. Once you show you are honest (not pretending to be), you will make a lot of deals. If you lose one deal because you are honest, so what?! There are a ton of other deals out there.
why doesnt my signature show in my posts?
The sad truth is, we are a nation of liars. If you run into a long lost friend and he’s gained 1500 pounds you can’t be brutal and tell him he looks like disgusting slob, no, you would have an enemy for life. Instead you say, Joe, you look great, you been working out? I have discovered you can NOT be totally honest in business or in private life.
My buddy Frank’s father was successful and he claimed you can never tell a client your making a ton of money off of him. When asked how was business he wud say, I’m just barley keeping my head above water. But he had the gorgeous home and cars.
If you think you can tell a homeowner that your going to wholesale their house and make 40 Grand and they will be OK with it, I got a bridge I’ll sell you.
So Mr. Jerry, your goody 2 shoes honesty is the best policy response is not realistic.
Not mentioning certain facts in the transaction I got to tell you is not being honest.
Also I’ve learned (the hard way) that people that tell you they are honest, you better run.
If you want a lesson in dishonest people do business with a christian.
I try not to be a negative pessimistic ahole, but these have been my observations.
Let’s embrace reality and make some frikin money…
Rando