Connecticut Has The Regulations We Need

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Transcript

The New Wholesaling Rules Explained

Setting Up A Rare Live Close

Cold Outreach To An Absentee Owner

SPEAKER_01 0:03

Welcome back to Wholesale and Around the World, the Connecticut edition. Today we're going to be talking about the Constitution state, which comes in with a population rank of 29th most populated state with just over 3.6 million residents. I have to say, despite the fact that Connecticut comes in ranked as the 29th most populated state, it is one of my least favorite states for virtually wholesaling. And it's kind of kind of odd because I actually enjoy most New England states, specifically southern Maine. I actually really like Maine. New Hampshire is a little bit weird, but Massachusetts has been good for us. Rhode Island has had really good moments. But Connecticut has always just lacked volume. And I don't quite understand because it's not necessarily volume of leads, it's just volume of actually motivated sellers. And this isn't just necessarily my opinion. It's also people that I know that are wholesaling inside of Connecticut that are local to Connecticut. We have several TU members that are that live in Connecticut in different places in the state. And they regularly are talking to me like, hey, we have to expand outside of Connecticut to be able to get the volume that we need. Now, there are a couple of members that are flipping and they own properties in Connecticut. They're doing really well for themselves, but just strictly wholesaling inside of the state of Connecticut is rough. And it's just because you can't get enough volume there. And so for that, it's one of my least favorite states. We just we don't ever close deals. So I'm going to show you guys here at the end of the episode a live close. And it's so funny because I've done all these 50-50-50s and live seller calls. And so it should be relatively easy for me to dip in the bag and say, here's a good closing that I had in Connecticut. I had to go all the way back to the 2020 original 50-50-50 to pull out a live close in Connecticut. That's how rare it is for us to actually, or at least me in particular, the company itself has done more deals than that one, but to have an opportunity inside the state of Connecticut. So just purely based off of that, I don't really enjoy Connecticut. And then there are a couple of other things that you know kind of push it down the list. It is an attorney state. And so you know you guys know how I feel about attorney states. I will say it's nowhere near as bad as like New York or New Jersey when it comes to those closing attorneys. It's very middle of the pack. Now, this regulation, if there's one positive that I would take from Connecticut, is that I wish this regulation is the regulation that was just used across the board nationwide. So let me break this down. This is Connecticut allows wholesaling, but imposes strict disclosure and licensing requirements to ensure fair practices and protect all parties involved. Now, the licensing requirement is that wholesalers must have a valid real estate license to market and sell properties. Okay, but that's fine. Wholesalers don't sell properties. We are assigning our equitable interest. So that eliminates that. They just don't want us taking it to the MLS and things like that. The disclosure is wholesalers must disclose their role in writing to the seller. And this started on January 1st, 2025. All parties must be informed of the wholesaler's intent to assign the agreement for profit. I love that disclosure. I think that regulation is actually beneficial to everyone involved: the seller, the wholesaler. It holds us accountable. It forces transparency. So I welcome that right there. The purchase and sell agreement must include an earnest money deposit and a clause allowing the assignment. I love this regulation. I think Connecticut got it correct. I wish every state out there would uh bring on uh regulations similar to this. This is very similar to what Ohio brought on, and it's so much better than the states like uh South Carolina, Nebraska, Oregon, Pennsylvania. Those are wild and extreme regulations. This is actually fair and protecting the sellers and also holding us as the wholesalers accountable, enforcing transparency, which is what we need. So I welcome this regulation. So that being said, I do have a live seller call for you guys to watch of me closing a deal in Connecticut. It is old school. Old school before we even had the office, before we even had PBL leads. This was a lead that actually came from me pulling list on batch leads, skip tracing it, SMS. So enjoy this live seller close in Connecticut. I believe it's the only one that I actually have recorded. So it's a rare thing. It's one of our lowest volume states. But again, we're gonna bring you a wholesaling around the world for each and every state. So this was the Connecticut edition. Show me some love, like today's video. We'll see you guys tomorrow.

SPEAKER_02 5:49

Hello?

SPEAKER_01 5:50

Hello, this is RJ Bates, the person that was texting you about your property on Reading Street.

SPEAKER_02 5:55

Yes. Hi, how are you?

SPEAKER_01 5:57

I'm doing fantastic. How are you?

SPEAKER_02 5:59

Good. How did you know that I was interested or thinking about selling?

SPEAKER_01 6:03

Well, I didn't know specifically. It was kind of just uh an off chance that you might be because you're you've got a different mailing address than this property, so kind of makes you what we call an absentee owner, just that it's not your personal residence. And so it's kind of what I do for marketing, just reach out and see, hey, do you want to sell it or are you in love with it? Or you know, where are you at?

SPEAKER_02 6:28

Well, actually, I really want to, I mean, it gives me good yield, to be honest with you, but I just don't want to deal with it. Gotcha. Especially when the tenant has a toilet issue that she doesn't report to me and they try to fix it themselves, and now the situation has just that bad. Thank God we were able to go in there and do some stop gap, but I need her out so we can finish, you know, the complete repairs. So it's just situations like that to just turn you off from just having to deal with that.

Tenant Damage Drives Seller Motivation

SPEAKER_01 7:00

Oh, yeah, we we call that tenants and toilets. That's the that's that's the main reason why people that own rental properties want to sell their properties. It's crazy that one little thing in a house like a toilet could be such a problem.

SPEAKER_02 7:14

But uh it it it became a huge problem because for six months she didn't report it, and now it's seep through. It's so the toilet is literally above the kitchen, so now it's stuff coming through the ceiling of the kitchen, it's damaged the counter. So I mean, it's it I it I to be honest with you, it's times like these that I just want to say, seriously, seriously, like what are you thinking?

SPEAKER_00 7:40

Oh, yeah, I I agree.

SPEAKER_02 7:42

When you when you hold on to their security deposit, they say, Well, you are unreasonable because it was it was a toilet problem. And I'm saying, then that's fine. If the toilet problem I know I'm responsible, I'll be happy to fix, but if you don't tell me for six months and then try to fix it yourself, I'm not giving you your money back. So let's go to court.

SPEAKER_01 8:01

No, that that actually, I don't know what kind of lease agreement you have, uh, but the sometimes our leases have in there that they have to report an issue with the property within, I think it's like 48 to 72 hours, you know.

SPEAKER_02 8:19

Right. So something similar is in the lease. I have several parts there, and it also specifically talks about um notifying me about it and not having people who don't know what they're doing try to fix it.

SPEAKER_00 8:35

Right.

SPEAKER_02 8:36

So all of those things, I mean, and and I'm not trying to to to uh to to take somebody's security deposit, it's COVID time and all of that. But now, if I just had to fix the toilet problem, it would have been X. Right now I have to fix the toilet problem, a roofing problem, cabinets. Because now the whole area was so soaked and saturated with all that stuff coming down that all of that repairs have to be done.

SPEAKER_00 9:05

Right.

SPEAKER_02 9:07

So, so Hamas, you know, you need to make me an offer. You know what the comps are?

SPEAKER_01 9:12

Yeah, it's what I'm looking up right now. I'm trying to find comps. I'm trying to find other properties that are a row house like this.

SPEAKER_02 9:20

So that's unique. Yeah. Because yeah, but it's a it's a lovely, I love the house itself. Um, I just sometimes the challenge could be because there's no parking. I mean, my girlfriend of mine was trying to get me to go into Airbnb, and I'm like, I just don't even want to be bothered. That's just where I am.

SPEAKER_00 9:40

Right.

SPEAKER_01 9:43

Okay, give me two seconds here. Did you have an asking price of mine, or were you guys thinking about selling, or or where were you at as far as the timeline goes?

Comps Are Scarce In Row Houses

SPEAKER_02 9:54

So it's amazing because if you go out there on Zillow, you can see what the house, the inside of the house, looks like. There are a couple pictures out there on Zillow, and I've been watching what Zillow has been saying, and I've just seen the numbers decline. It started off like at 9 to 9, and I think the last time I checked it was like at 83 or something like that. That's what Zillow said.

SPEAKER_00 10:18

Right.

SPEAKER_02 10:19

So I'm just saying to you, you make me an offer and let me think about it.

SPEAKER_01 10:24

So the the only property that is sold in that little strip of row houses was 50 Reading Street. And it and it was basically the exact same floor plan three bed, one bath, 1280 square feet. Um, it sold for 50,000, but it needed everything.

SPEAKER_02 10:48

Right.

SPEAKER_01 10:49

It had no flooring, it obviously needed paint and and stuff like that. So your property is in better condition than that, right?

SPEAKER_02 10:59

And and it would have been, I would have said to you it was in good condition if I didn't have to fix the toilet situation, and that to put in new counters, new counters, and I'm just gonna take out all the counters, put new counters in. So that's just a little work that's gonna be done. And I'm hoping that can be done like in a week to 10 days. So um mine is in way better condition, nice hardwood floors, um good windows, everything was was um changed out when I bought the common however many years ago. Um, everything pretty much is solid in there.

SPEAKER_01 11:39

So has the toilet situation, like the plumbing issue, has that been fixed?

SPEAKER_02 11:45

So so the leak, so so what happened was she had a toilet in there that was an old toilet. So I upgraded the toilet, and apparently, based on the space, the space in there was very tight. The guy that installed the toilet does work for me all the time, put the toilet down in securely. Something happened and the toilet shifted. Instead of them reporting to me that there was something going on with the toilet, she had her boyfriend go by that ceiling thing and they sealed around the toilet, but it wasn't secure, it wasn't bolted down securely. So stuff was happening. So I have since sent somebody in there that went and um did the work. So it's no longer that's no longer happening, but because they were still in the property, we couldn't do the repairs to not because also because it's COVID time and they were home all the time, that they would have had to come over the house for us to really be able to get in and resolve the whole thing. So I think the whole thing of the leaking with the toilet is resolved, but we still need to go in there and finish fixing and finish the roof, the ceiling and stuff, because it was months of leak. So there was leak from I'm assuming the toilet that was going on in there. So all of that flooring is gonna have to be changed out.

SPEAKER_00 13:12

Gotcha. So when you say the the roof, you're not talking about the exterior roof, you're talking about the ceiling.

SPEAKER_02 13:18

I'm sorry, the ceiling, the ceiling.

SPEAKER_00 13:20

Gotcha. Okay.

SPEAKER_02 13:22

So yeah, so that shouldn't be too much of a lift in terms of what needs to be done. And like I said, that's the only problem. Everything else is pretty solid. And I heard that house across the way that sold for$50,000. I hear the guy spent another like$50,000 or$60,000. He spent like mad money because he had to, like you said, he had to do everything.

SPEAKER_01 13:49

Right. Yeah, I was I was looking at that. It was was that person is that an owner-occupant? Is that a an investor?

SPEAKER_02 13:59

I think it was an investor. It's funny because the guy that owns the one next to me, I don't even know which direction. I'm 51, so he would have been 49. 49 was trying to buy that house because he was the one that told me about it. And I think they started at 20 something fellows and then they went into a bidding war. So that's why the the price went up so much. But I hear it's fabulous inside now.

Locking In Seventy Thousand As Is

SPEAKER_01 14:24

Gotcha. Man, this is so rare that I can't find anything comparable to this property. It's really um frustrating for me. Normally, by by this point, I can say, you know, here's where my offer is gonna be, but I'm really struggling um finding something that is is comparable outside of that. Um I mean, just it's sounds like it was it was a good rental up until this point. You were getting$12.25 a month. Um I mean just throwing a number out there, I would probably want to be somewhere in the$65,000 to$70,000 range. Does that sound anywhere close to where you would want to be?

SPEAKER_02 15:21

Um if I just didn't want to do the work, let's say I said to you, okay, I'm not gonna do the repairs to the ceiling and you just get it as is, I would say, okay. Um, because I just don't want to be bothered, I would say, I'd say, okay, I'd take$70 for it if I didn't have to do all of that. But I'm gonna have to still fix this stuff. It's still not gonna cost, I don't think it's gonna cost me$5,000 to fix, to be honest with you. It's just the the time and energy and and it's just and then I just really like I tell you, I really just don't want to be bothered.

SPEAKER_01 16:03

No, I I completely understand. All right, well, let's let's do it. Let's do 70,000 and and I'll just buy it as is, as long as it's vacant. I want to make sure that that tenant is gone.

SPEAKER_02 16:16

Right. Oh my god. Okay, sounds like a plan.

SPEAKER_01 16:20

All right, so can you text me your email address and I will send you over the agreement right now so we can open escrow?

unknown 16:28

Okay, all right.

SPEAKER_01 16:30

All right, I'll I'll send that over to you probably in the next 10-15 minutes, okay?

SPEAKER_02 16:34

All right, thank you. All right, bye-bye.