One of the reason flipper or wholesalers use LLC is to circumvent the deed restrictions that certain gov agencies put on their REO properties.
Lawys scenario is simply a thief setting up a scam….
Your points are valid about rental home concentrations however it’s reality in virtually all markets in the US
Think you missed cheeves point somewhat
Not to put words in his mouth, but when your a liecened RE agent there is a high3r standard, and most US wholesalers are not liecened
And skirt the laws (no pun intended) the Aussie companies that have opened up in the US by and large just do whatever they want vis a vi license issue,s
True. I assumed all US Wholesalers were licenced. It was who they passed the sales onto that have been my main bugbear. I didn’t realise it all started (potentially) at the very bottom…. hmmmm.
Jay: LLC's are included in that deed restriction too for the most part. Unfortunately some of the houses we buy have 60 days flip restrictions on them. Mostly B of A stuff. I hate it
to clarify… investor buys with LLC… does not transfer title however just sells LLC interest. thats a non recorded transaction and will circumvent the flipping deed restrictions. Title remains the same does not transfer.
The incident that Lawys talks about is just flat out felonious activity… Investor buys a share of LLC, LLC is suppose to own asset A howeever does not…. and investor has bought into a shell with no assets.jayhinrichs wrote:The incident that Lawys talks about is just flat out felonious activity… Investor buys a share of LLC, LLC is suppose to own asset A howeever does not…. and investor has bought into a shell with no assets.
With luck, we may get something done on that. I wouldn’t have thought it was possible to screw up that much, but you have enough monkeys and typewriters and look what can happen!Texas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71lawsjs wrote:These guys, it must be remembered, can read like a who's who of banned company directors in their home countries. These guys are the type who would have moved from roofing insulation to school halls, solar panels and then had the brains to discover real estate in dodgy US cities.
You forgot to mention previous roles in selling two tiered real estate in QueenslandTexas Cash Cow Investments AustraliaParticipant@texas-cash-cow-investments-australiaJoin Date: 2011Post Count: 71Luke B wrote:worldinvestor wrote:Seriously, how could you possibly make an informed decision on whether this group is sourcing suitable properties when you have no information. A couple of street names and viewing zillow is just not going to cut it. Would you use the same criteria to purchase property in Australia?
Also, zillow has some useful information but what I have found is that property estimates appear to be always on the high side.
Seriously, i don't think you could. Apologies if my intent was ambiguous. mostly i was trying to see how much information I could extract. I recon I could have found the house had I enough patience.
I would be hesitant to run with these guys, I've made my decision to not use them, take from that what you will.
I did speak to them about finance though. what they told be is that they set you up with a llc and then using the ein number set up a hsbc premier account (though you'd need $100k USD to do it). you can then get lending via hsbc. they also mentioned some private lending at circa 7%, with the intent that you'd use that to build up credit then move to a national bank with better rates.
you could also just get a hsbc premier account in Oz, though the entry requirements are steeper.
Caveat: I'm pretty new at this, so I may say something pretty daft
If they are telling you that you can go from private funding…build a credit rating and then move to a national bank….. they are wrong, wrong, wrong.Texas Cash Cow Investments Australia wrote:lawsjs wrote:These guys, it must be remembered, can read like a who's who of banned company directors in their home countries. These guys are the type who would have moved from roofing insulation to school halls, solar panels and then had the brains to discover real estate in dodgy US cities.
You forgot to mention previous roles in selling two tiered real estate in Queensland
That is very very close to the truth.
Texas Cash Cow is correct on the lending side. Private money does not get reported to any type of credit bureau. There would be no history for a conventional lender to look at.
LAWSJS: So you had a painting quote marked up over 600%? I've seen a lot of shady things in my career but I can't say I've ever seen a markup like that unless it was a tangible trading ripoff or selloff.
Bottom line is that there are thousands and thousands of licensees and wholesalers in the U.S. It is your choice as an international investor to come here and make friends. I am on the ground and consider myself a very innovative thinker and strategist. That said, it took me almost 5 years to create what I consider my perfect team for my business. Again, I am local, and I still went through 10 property managers before sticking with the same one since 2007. My lender for U.S properties resides in California! He lends FL and NJ, both my marketplaces. Hands down he is better then anyone I have worked with in my backyard. My partner? He's a foul mouthed, frugal, arrogant, punky, pretentious jerk…but he allows me to make the decisions and has a very creative mind in the real estate business. The team is what makes me money personally and professionally.
LAWSJS and all those looking. Why don't you just look for licensed brokers who are also wholesalers? They exist. Not many, but they do. I love giving investors the peace of mind knowing that I have their backs in a sale. I have to or I lose my license. If I lose my license, I lose my business. If I lose my business I lose my houses and money…And if I lose my money, then girls won't like me anymore! So see?? I have more to lose then those without licenses. We value that and honor our responsibilities. Well, at least most of us do
On a handheld, but regarding the $15k bill. I said $1k worth of work but the reality was they may have just changed the locks. After paying for that and property management and not getting the rent the house is now bordered up. Can you believe people could be so unethical? I didnt but I sure as hell do now!
Where do you find licenced Wholesalers?
LAWSJS: Things to watch out for:
- Unlicensed wholesalers
- wholesalers with no inventory…if they send you an address, cross reference it on public record to see if they own it.
- Those that have you wire escrow or deposit money to them or their firm. Never ever ever ever do this. Google Demetrius Mathis in Georgia. He used to read these boards.
I'll defend #2 a little. As a wholesaler, our buying/selling entity is the same for all of our properties. Once we have a secured deal in place with the seller we make it part of our "available inventory". So even if you cross reference the owners name, sometimes it will still have the current owner and if we closed on it, it still takes 2 weeks to record our name in public records. So that isn't ALWAYS accurate….However, we never send out inventory that we do not control.
I don't know where you can find licensed wholesalers. There isn't a directory of those people here in the states. I don't know many. In fact, my competitors in my market are unlicensed. Probably why we get a bit of their overflow. We are licensed, we have our own funds, and that's just the way we do things.
I haven’t bought any subprime stuff myself, but have been asked for advice numerous times. It is not simple!
So in summary you are saying there is no way of confirming the ‘legitimacy’ of any wholesaler? That would imply your credentials are a total waste of time… Very unfair on you.
The easiest check then to make (it would seem) is
1) Get an address – mandatory
2) Ensure the ‘seller’ you think should own it (i.e. a bank if a short sale etc) actually does own it and not XYZ123 LLC
Would this be a reasonable/fast and accurate process? Using your experience as a wholesaler, is there a better step to ensure you are dealing with someone ‘legit’?
Thanks in advance Cheeves – really helpful stuff…
3) Never wire money to the ‘Selling’ firm?
Isn’t this analogous to sending funds to a real estate agents Trust account??kylermriceParticipant@kylermriceJoin Date: 2011Post Count: 314
Title company is your best bet
It's simple to verify. Here…Click on this link: LICENSE
That's my verification of my license. Ask your wholesalers to produce you a link of their license. If they can't?? Well then they just aren't licensed In the link provided, at the bottom you can also check on any complaints made against the licensee. I am clean as a whistle and I take pride in that. I have gone through a couple business mis-haps (who hasn't) and I had someone complain about me to the licensing board a while back. I believed I was in the right. After a thorough investigation, the state ruled in my favor. My point is, it is a well governed industry. If I mess up, it is documented. If someone wants to throw a fit for any reason, they have to provide sufficient info for a state investigation.
Broker licenses are public record in all states in the USA. Don't let anyone tell you different.
Simple rules to follow:
1) Get the address.
2) Ensure the title for the address is in a company name that makes ‘sense’, not an unrelated (unexplained) 3rd party / LLC.
3) Only wire purchase money to the Title Company involved in the transaction, Never the person or firm ‘selling’ the property.
4) Always check the legitimacy/Licences of the broker or agent involved (remembering no one is perfect and everyone complains in the US!).
Anyone see any glaring errors or omissions in that list?
FYI, there is really no legitimate way to document a complaint against a wholesaler. As licensees, we are required to disclose EVERYTHING. In fact, when I went to real estate school a while back, all 3 of the states I am licensed in begin by telling students that the most important thing to do as a licensee is DISCLOSE DISCLOSE DISCLOSE. They drill it in your head. I've seen plenty of people fined, suspended, and revoked due to non-disclosure. Unlicensed wholesalers don't have to… That said, I'm not saying unlicensed wholesalers are bad. I just happen to be required to abide by rules.
I've said this again and again, I empathize with nobody who sends their money to the "selling firm". Always send your money to a title company in Florida or a title company / attorney in other states. If you are a sophisticated investor, the first thing you ought to know is where to send your money safely.
LAWSJS: I mentioned earlier about your #2. Sometimes we allow investors to see inventory we haven't closed on yet. This would be titled still under the old seller and not us. However we never send one out that we don't have control of.CheevesFinancial wrote:>LAWSJS: I mentioned earlier about your #2. Sometimes we allow investors to see inventory we haven't closed on yet. This would be titled still under the old seller and not us. However we never send one out that we don't have control of.
In which case there is an obvious and sensible explanation, which would clearly allay any fears anyone might have.
I have never dealt with anyone in the US who is legitimate that doesn’t get really pissed off with having to comply with sometimes crazy laws that the ‘bad guys’ simply ignore. They are rightly proud of their legitimacy and so they should be. If they are legitimate they will immediately be able to point you in the direction of the governing body or if you use a buyers agent type scenario they will be using legitimate people – an easily explained and simple legal trail is easily established.
Deal with people who must comply with the laws of the land and even you pay far too much for something but can justify it in your own mind, you will be protected from the worst of the scams.
Then you just have to find a rehab team and very good management – easy:)