Depressed and .. HELP! - Posted by Gerald(NC)

Posted by Inland Realtor on October 18, 2005 at 20:45:44:

I’m not an expert on NC law, but usually you’ll be OK as long as you disclose that you have a RE license when you are investing.

I’ve found that it is no big deal.

Depressed and confused…today … HELP! - Posted by Gerald(NC)

Posted by Gerald(NC) on October 18, 2005 at 18:15:55:

Most of the time I am in a great mood no matter the circumstances. But, today hasn’t been a good one mood wise.

First off I am currently in RE school for my license. It’s going fine though of course lots that’s said makes me wonder if investing and RE Broker can go hand and hand as I know them. So that’s some of my problem.

Also, I almost had my neighbor’s house sold, but was doing it under the table so to speak cuz I’m not set up to do flips on my own really yet, (in the same fashion as my partner’s biz). The woman buyer backed out though.

So that brings me to today. I need another FSBO sign cuz right now I have 3 properties I am trying to sell in the way my partner’s biz operates, (double closing flip).

As I was walking into Home Depot I was thinking, “Man he’d really probably be better off using a real agent, and he’d still net the same as he would dealiong with me if he didn’t lower his price.” and “I don’t really know how to do it alone anyway” and “I could just give him my lender’s info and tell him how he should advertise his home FSBO and make as much as he really wants to on it.” and “He’s not as motivated as I want him to be anyway, and it’s going to take the right person to come along and pay that for that house even if it did appraise as high as it did.” and “Man, can I ever get into REI really with no money or credit?”

I mean really, the last question is the worst for me. I’m not a negative person. But since I posted here on CRE how my partner’s biz plan works, and then got slammed cuz of it, I’m really shying away from doing retail flips like that, and have no clue of distressed properties in need of rehabbing I could flip to another investor. Sub2’s scare me to even ask someone about, as your typical FSBO seller isn’t in a situation of “really” needing to sell their home.

My original plan was to get started on my own using my partners same “contract the home, get a new buyer financed on the property, get them contracted, get my profit.” After everyone I have been talking to about “our” way of doing it has been telling me “you’re acting as an agent like that” I got back into Bronchick’s Flipping book. And in it, he spells out exactly what we’re doing! Cept he’s not mentioning getting someone financed, so he’s using cash/pre approved buyers in his examples. (and not only flipping to other investors mind you).

So that makes me more confused. I spelled out what Bronchick says in his “Steps” to my lender, (Haven’t sold anything through her yet, but was close with my under the table deal), and asked her to share it with her title company and lawyer to see what they say about it. And I get the same “You’re acting like an agent if you do it this way.”

So wth do I do? I’d love to buy rentals, but I don’t have closing costs myself. That’s the “old” way of getting into investing I know. Sub2’s sound great if 1. you can find that “right” person. and 2. If I had the money to make the payments while it’s vacant.

AND I’m actually liking the sound of being an agent and working with already qualified home buyers, in the since that they aren’t in need of special financing and they already have money saved for down payments and closing costs. Where as most of the people I have tried to get in my contracted homes over the last 3 months have had neither dp’s or closing costs!

Assignment fees! Another big iffy for me! I’ve got a guy right now who is prequalified for a $85k FHA loan. I don’t know enough about FHA’s yet to know what he really needs to come up with as for the closing table costs. He doesn’t know either! I know I can find him a home, but you can’t include the assignment fee on the HUD 1 statement, so that can’t be “part” of his financing! So how the heck would I make money off this dude? My partner’s way of flipping/Bronchick’s way sounds great (double closing), but “you’re acting as an agent” crap keeps ringing in my head!

Most days I’m not like this, but this seems to be happening more and more lately.

Also, I’m not even sure my partner is going to be able to pay me if one of my current homes sell or not now until I am a licensed agent myself, since he is now a broker (if I’m correct). So why should I take on anymore homes for him? Yet, can I really do the same kind of deals myself?

Also with this whole “licensing” thing now, I am afraid I’m going to do something stupid and screw that up as well one day by trying to invest. Like prying eyes are watching me. Yet in NC they are trying to make it where all REI’s have to become licensed.

I’m even considering going to work part time for a RE company after I get my license so that I can learn all the broker/agent issues in real life, and actually have that experience before opening my own place. Do I even want to open a “Real” brokerage?! Man what is wrong with me?! Have I forgotten all that I have read about REI now? Have I been brainwashed by the REC? Are my concerns legit?

Someone, anyone HELP!!!

Re: Depressed and confused…today … HELP! - Posted by Natalie-VA

Posted by Natalie-VA on October 20, 2005 at 10:34:55:


I’ve been watching your posts and waiting for this one. I’m not going to weigh in on the legal/illegal thing, but in a nutshell, your partner’s method seems to be convoluted and causes people to be suspicious. For that reason alone, I would avoid it.

With that said, it seems to me that you have a really good attitude and are really good at talking with people. You seem to have a talent for bringing buyers and sellers together. I would continue on the path to getting licensed and be an agent. It’s a great way to learn the business. Once you learn more and gain some confidence, maybe you can venture into investing. I have found it’s much easier to wholesale to other investors, not retail buyers.

If you don’t own your own home, that would be a great place to start.

Keep your chin up, get that license, and do what you’re good at!


my story is similar… - Posted by lukeNC

Posted by lukeNC on October 18, 2005 at 20:00:02:

It is not impossible, but it is VERY difficult to make money in RE without being an agent and without access to money.

With access to cash you are able to do amazing deals, but until you get there, you will be fighting an uphill battle, not impossible, but very difficult.

I started with quick flipping. Getting properties under contract, then selling my contract to other cash investors. I was great at finding deals, but I got cheated out of my profits probably 80% of the time.

The great deals require you to have the cash to take advantage of them immediately. Do you know someone with cash? Having the cash makes you powerful, in my opinion. Someone wants $70k for a $140k house right now? If you had that $70k now, you could take advantage of that deal. In my market, It’d be very difficult to sign a contract and then sell my contract for even $75k. Why? Because those other investors will want every possible penny out of the deal.

Until I actually found someone willing to front cash to me for deals did I start REALLY making money in RE. Then, after making a nice chunk of cash, I no longer needed the partner. I dozens of awesome deals every month because I’m a cash guy.

I think by being an agent, you can really take advantage of the game. You could do a “flat fee” listing service, property management, list REO’s, anything. You can make ALOT of money being an agent if you are willing to hustle. Then use some of that money to take advantage of the great deals out there. If I could to it over again, I would have been an agent first.

Re: Depressed and confused…today … HELP! - Posted by Bruce W. Ford

Posted by Bruce W. Ford on October 18, 2005 at 18:41:13:

Take a deep breath…

It sounds like you are going different directions in hopes that one scores. That’s a tough way. Why not focus on one “way in.”

You said, “I’m really shying away from doing retail flips like that, and have no clue of distressed properties in need of rehabbing I could flip to another investor.”

I don’t know where you live in NC, but I’m sure there are wholesalers in your area that come across rehab deals all the time. Is your partner a wholesaler?

Get your hard money path cleared. If your credit is poor, you might have a lower LTV, but you can find money. Then find these wholesalers and get yourself a house where your hard money LTV covers the purchase, closing costs, and most or all of your rehab. (They are out there, I’ve had six this year where I had enough in the original mortgage to cover it all including rehab, and yes, I bought these with a wholesaler.)

Then have someone rehab it. You can then sell it, or re-fi and pull out some cash at 85% or 90% LTV.

The cash in one deal can help you turn things around, not to mention if you do this over and over.

Chin up!


let me add… - Posted by lukeNC

Posted by lukeNC on October 18, 2005 at 20:03:23:

Being an agent with the mind of an investor…a lethal combination…

Re: Depressed and confused…today … HELP! - Posted by Gerald(NC)

Posted by Gerald(NC) on October 20, 2005 at 09:08:04:

Thanks for the encouragement Bruce. lol it’s well needed.

Re: let me add… - Posted by Gerald(NC)

Posted by Gerald(NC) on October 18, 2005 at 20:21:46:

Wow, thanks for the encouragement Luke. You’ve apparently done well for yourself, and seem very wise on here as well, so I really appreciate your comments to every post I make. Thanks!

I don’t neccesarily have “someone” with cash yet. I could possibly, and that’s possibly, get my aunt to front me some doe on a cheap fixer upper, but I don’t know. I know of about 6 under $30k homes round here listed with a realtor. And as I think about it, I also know of a few vacant properties, one of which right down the road from home I could possibly get for $20k or less. I feel like if I could get something for say $15k or so, and maybe need $5k or so in it to make it habitable I could talk her into lending me the money. I figure I could offer her a 20% return as well for the help.

And yeah, after I get those first few deals, I will then have the cash to deal with which will make the job much easier. Till then I keep looking.

Thanks for the agent advice encouragement as well. I know it has some great benefits, I just get scared that maybe I am/was making the wrong decission in getting licensed and being under the scrutiny of the REC.

Thanks bro, for everything.

Re: let me add… - Posted by lukeNC

Posted by lukeNC on October 19, 2005 at 16:21:58:

from what I know, you have to be disclose that you are a realtor when you invest.

I disclose so much stuff as an investor now, due to the amounts of profits being made. It cant be that much more.