Real Estate Articles » Wholesaling

Wholesale Investors And Rehabbers

By: Duane Stephens
Submitted: 12:32AM on Thursday 21 May 2009

WHOLESALING REAL ESTATE
PART ONE – INVESTORS AND REHABBERS

I have been a real estate investor for many years and specialize in wholesaling properties (single and multi-family properties). I have been very successful in this niche of real estate investing.

The reason that I have been successful is simple: Having a large data-base of investors to offer my contracts to. Without those contacts, you might want to look into another career. I advertise aggressively for motivated sellers and when I put a house under contract, I need to be ready to move fairly quickly. The seller wants to move quickly and I need to make a living. My standard contract with a seller allows me approximately 45 days to find an investor or rehabber to purchase the contract that I have. But things happen and sellers get anxious and I don’t want to lose potential profit.

Normally, I will sign a Letter of Intent with the seller that allows me a few days to prepare the contract and investigate the house more closely. In most cases, I will have an Assignee for my contract before the Letter of Intent expires. Of course the new buyer will want to perform the needed inspections on the property before they commit to an Assignment Agreement. But my investors know my reputation and value my experience when I give them an expectation of repair cost that are needed on the home. They also respect my experienced opinion as to the actual retail or after repair value of the home. I do quite a lot of research before telling an investor what they can retail the house for when the repairs are made. What the general area of the home is like and what period of time it takes to sell homes in that particular neighborhood. Professional Wholesalers are worth their weight in gold to many investors. I said “Professional Wholesalers”.

I really don’t see many of those in this business. They certainly are not coming from these gurus that teach this business at these expensive seminars. Most of those students leave those courses and end up quitting the business very quickly. No support. Why? Because their students run out of money and that is when any kind of support ends. Many of these gurus know nothing of this business, but know an exceptional amount in regards to Marketing. I will guarantee you that they spend 100% of their time marketing, not wholesaling.

If you are going to build a credible base of investors that trust you and your advice, you will have to have ongoing support until you learn all of what we do in this business. It takes time and effort on your part. I know for sure that there are plenty of people that want to truly learn wholesaling real estate, but the frustration of getting deals done without guidance will eventually lead you back to places you are trying to leave.

How to find investors and rehabbers to purchase your contract.

Here is a tip for you in this article.

Grab your local Sunday newspaper. Go to the real estate section. Easy so far? Here in Dallas, Texas, our newspaper is full of people trying to rent their homes. Guess what? Most of those people are investors. I would be willing to bet that 80% of people trying to rent property are investors and are looking for more good rental property. Property with big equity.

Call them and tell them that you are a wholesaler and you locate property with big discounted prices that usually need some repairs. Put them on your list. When you do contract a piece of property, email it to all of them. Just like fishing. Someone will bite. The more investors you have in your data base, the more fish you will have for dinner.

At 08:09PM on May 25, 2009 - Naj B. said...

How do you find the motivated sellers?

At 07:55PM on June 12, 2009 - Duane Stephens said...

How do you find motivated sellers? There are several ways to find sellers that are very anxious to move their property. Some cost very little , but have little results. You most definitely have to advertise for these people. You have to have a marketing and advertising campaign that gets motivated sellers to call you. Houses don't call, seller do. I get most of my business from placing ads in newspapers and publications. Examples: I buy houses/pay cash/any condition and any area. A great example of spending advertising money is a company located in Dallas, Texas (We Buy Ugly Houses) They have branded their name in everyone's brain. You have to spend money to make money in the Wholesale Real Estate business. There are deals to be found if you want to do a lot of research, but I like to just sit back and have sellers call me. Anyone in this business will agree that you have to brand your name or entity via advertising. Duane Stephens

At 11:41PM on July 12, 2009 - C Full said...

Do you use any other avenues besides the paper to advertise

At 01:17AM on July 13, 2009 - Duane Stephens said...

Hello C Full, Nice Talking with you. I suppose you are speaking of finding Investors? I have done this for so long, that I have a very good data-base of investors. I rarely have to call another wholesaler to assign a contract. That usually happens if the seller is in another town near Dallas / Ft. Worth and I don't have an investor interested in that particular city. Then I rely on my networking program to find a wholesaler that works in that area. It is all about connections and your work to build that base up. 1. For sure, go to Auctions. The place will be crawling with investors. Take your business card and give away as many as possible and make sure you get one of their business cards. 2. REI Clubs ( Real Estate Investment Clubs) I encourage you to go and meet other wholesalers (networking) and investors that attend those meetings. 3. Build a website. I have many investors forward me an email from my investor section. Take a look: (www.LearnToWholesaleHouses.com) (Investors Button) 4. Advertise in the Craigslist / Kijiji / Oodle they are all free. Place an ad and state that you are looking for investors to buy wholesale properties with big amounts of equity. You can also advertise that you are a Wholesaler and are looking for Houses ( I BUY HOUSES) 5. I don't know where you live, but here in Dallas I could go thru the rental section of the newspaper and find at least 40 -60 investors in a months period of time. You may have a smaller newspaper. We also have the Ft.Worth Star Telegram, another big newspaper. If you live in a smaller town, you can find investors in the newspaper. Every town has people that want to invest in real estate. Keeep working on it over months and years and you will soon get to the point where you have all the investors that you need. I have a small group of solid investors that pay cash and I assign most of my contracts to them. Pay your dues and you can sit back and put it on cruise control. Hope that helped - Duane Stephens

At 02:56PM on July 26, 2009 - Ron Wilburn said...

i have seen the signs around town that say, we buy houses for all cash and close fast, sometimes within a couple of day or a week. Are these wholesalers that have a database of investors that they know have the cash to buy? Or, where are they getting the cash to buy with all cash, that fast?

At 10:18PM on July 26, 2009 - Duane Stephens said...

Hello Ron, These signs are referred to as "Bandit Signs" and they are a means of advertising that wholesalers use to locate property from motivated sellers. I would only assume that they do have investors to buy the property if they get it under contract from a seller. If a wholesaler gets a property under contract it is certainly possible to close on that contract at the title company within three days. If there is a lender involved it could take longer. Lenders seem to set their own pace on these transactions. Many houses that I put under contract are free and clear on title with no lenders involved and you can certainly close within three to five days if everything moves smoothly. There could be other things that would take longer, such as tax liens, mechanic liens or other title issues. But if you are trained properly as a professional wholesaler, your contract with the seller should give you at least 30 to 45 days to finalize the closing. Remember , CASH IS KING in real estate. There are thousands of investors that have plenty of cash to buy houses. Investors also may be using a line of credit from their financial institution or they may be using Hard Money Lenders (Private Money). Wholesalers on most occasions are dealing with properties that won't qualify for conventional lending and you have to have a cash buyer to get the deal done.Beware of using bandit signs. Many city ordinances strongly disapprove of their use and big fines can be imposed. I don't use bandit signs as a means of advertising, but if I did, I would use a 1-800- number, much harder to track the source. Good Luck Duane Stephens www.wholesalehouseflipping.com