OfflineI am a buyer who loves full service wholesalers. But the one "contract" that seems to get ignored is the Scope of Work / Contractor Agreement.
I just had a deal with a DGer that fell through...
First, the rehab number on their site turned out to be $6k understated ($19.5k to $25.5k)
Second, when I asked for detailed explanation of quotes I was told "everything is understood under certain categories in the quote" WARNING SIGN! If they don't have a detailed quote from their contractor, run.
Third, when I asked for what was being done to be dialed back from $25k, they were unable to do something Very Simple: take one or two extra things OFF the quote and get a lower price, not much to ask but they couldn't do it. It took them 2 weeks to find a different quote rather than adjusting the one they had!
FOURTH, the straw that broke the Camel's Back, my independent appraiser went in, and there were puddles of water in the basement that was supposed to have been getting finished, meaning $5k in additional work, plus exterior work of $3k not mentioned in the quote.
The lesson here is DETAIL. If you can't manage dealing with contractors and getting detailed quotes, you're going to end up burning investors.
There were other things, like not getting the signed agreement until the day before close (after 3 weeks) that should have tipped me off lol, but I learned a lesson, only deal with A Players who can manage the Contractor Agreements with skill, that is MORE IMPORTANT than getting a "deal" if that's not managed properly and accurate to the letter, you will LOSE money even if you're getting a house at 50% of ARV!
Amen!!! Looks like you learned a whole lot!
"Don't tell me I can't, Tell me how I can."
Mark I am aspiring to be just that a full service wholesaler......
And going about it the way Matt explains it.....
Instead of guesstimation , as an investor buyer would it put your mind at ease if the wholesaler provided you with actual detailed account from contractors after having a home inspector provide an inspection report along side the a break down list of the items the contractor will use say from Lowes or Home Depo?
Joel (this goes out to all investor buyers)
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-
I had 1 buyer tell me once bc he knew the builder of the home & the quality of work, he knew the cma values (comps) were wrong or off on an mls property I had under contract . It seems like even though you do all the research on a home, they already know the numbers they're looking at, before looking at your fancy presentation, which is great. It takes time & effort putting everything together. Sometimes, I'll forget about the full service wholesaler part. But, I'm all for it when it works.
I just had a deal with a DGer that fell through...
First, the rehab number on their site turned out to be $6k understated ($19.5k to $25.5k)
Second, when I asked for detailed explanation of quotes I was told "everything is understood under certain categories in the quote" WARNING SIGN! If they don't have a detailed quote from their contractor, run.
Third, when I asked for what was being done to be dialed back from $25k, they were unable to do something Very Simple: take one or two extra things OFF the quote and get a lower price, not much to ask but they couldn't do it. It took them 2 weeks to find a different quote rather than adjusting the one they had!
FOURTH, the straw that broke the Camel's Back, my independent appraiser went in, and there were puddles of water in the basement that was supposed to have been getting finished, meaning $5k in additional work, plus exterior work of $3k not mentioned in the quote.
The lesson here is DETAIL. If you can't manage dealing with contractors and getting detailed quotes, you're going to end up burning investors.
There were other things, like not getting the signed agreement until the day before close (after 3 weeks) that should have tipped me off lol, but I learned a lesson, only deal with A Players who can manage the Contractor Agreements with skill, that is MORE IMPORTANT than getting a "deal" if that's not managed properly and accurate to the letter, you will LOSE money even if you're getting a house at 50% of ARV!
I think a lot of new wholesales get in the game for the promise of no money down deals. Meaning they'll get a deal putting LITERALLY no money into anything. That was one of my biggest mistakes because I would go around town getting terrible estimates on homes all because I didn't want to spend a few bucks for the right info. Sometimes it was cause I had NO money but most of the time it was that I was too cheap to get the right information.
Adam Macias
Adam your right there is no something for nothing and information too as tge saying goes you get what you pay for
Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-