Real Estate Investor · Tyler, TX · Member since 2009 · 36 posts · 3 votes
Hey everyone....got a question..Has anyone successfully wholesaled in a small town? Im currently living in a town with a population of about 25,000 and am planning on moving to a bigger city but my moving plans have kind of been put on hold for about a month and i want to go ahead and get started but im afraid i wont be able to do anything here..just wondering if anyone has had any experience and/or problems when dealing in a smaller area...
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
16y
Hi, if you're going to change horses in the middle of the stream consider the easiest one in town to deal with. Now why is this elderly lady known for not being nice? Because she has had to fight with tenants for years. Why don't you make her life alot easier and approach her to buy all of her properties with seller financing, she carries the note, earns almost as much as she gets in rents, no collections, no repairs, sell and defer taxes on gains, she will love that! Tell her you have investors that will buy everything and allow the good tenants to have an opportunity to purchase their home. She will receive an income for life and her estate will not have to hassel with real estate. You can even transfer it all into a trust. You could make the old woman smile again! You might be cranky too if you had to fix hot water heaters and roofs for tenants who paid late! So, if you're thinking of changing strategies, instead of selling to her, buy her out! Bill
Real Estate Investor · North Central Arkansas · Member since 2009 · 509 posts · 178 votes
16y
I don't think you'll have any trouble because of the size of the town. If I was you I would branch out into other areas as well. If you have some $ to spend on direct mailing they you can pick anywhere in the country to mail to.
With that said though, you still need to know your market inside and out no matter where you plan on doing business. The good thing about small towns is there is less area to cover therefore you'll be able to learn it quicker and apply the lessons learned to the bigger cities.
Real Estate Investor · Tyler, TX · Member since 2009 · 36 posts · 3 votes
16y
well i grew up in the town so im very familiar with it..not so much the prices (i need to work on that) but i do know what is considered the great, the ok and the bad parts to live in, lol. the reason i asked was because i do know that theres only a few diff people that own most of the rental houses here so i was a little nervous that they may have it all in the bag already but i guess that does give me an opportunity that i just realized while typing this...one of them is a woman who ownes just bout every rental house i ever called on when i was lookig for a place to stay and that means that she is prob willing to invest in more if i could find some deals that she doesnt know about already and just get ahold of her to see if shes interested..shes older tho and ive heard she isnt a very nice person to deal with but we will see..thanks again!
Real Estate Investor · Atlanta, GA · Member since 2009 · 117 posts · 7 votes
16y
Originally posted by Peter Giardini:
While I have do not have direct experience with small towns, the active investors I know are successful because they have buyers on the back end.
Whether they are assigning to other investors or selling directly to homeowners if you don't have buyers you add a lot of risk to your exit strategy.
Best of luck!
I was just about to ask the question myself. i know a smaller market where there are always houses, but limited investors. maybe instead of wholesaling in that particular area, doing a different investment strategy would work. (lease purchase, subject to, etc.)
Real Estate Investor · Tyler, TX · Member since 2009 · 36 posts · 3 votes
16y
Originally posted by Troy Michaels:
I was just about to ask the question myself. i know a smaller market where there are always houses, but limited investors. maybe instead of wholesaling in that particular area, doing a different investment strategy would work. (lease purchase, subject to, etc.)
yea but if you do it that way dont you have to have money yourself?
Real Estate Investor · Atlanta, GA · Member since 2009 · 117 posts · 7 votes
16y
Originally posted by LaBlanca Ponder:
Originally posted by Troy Michaels:
I was just about to ask the question myself. i know a smaller market where there are always houses, but limited investors. maybe instead of wholesaling in that particular area, doing a different investment strategy would work. (lease purchase, subject to, etc.)
yea but if you do it that way dont you have to have money yourself?
depends. if you have a end buyer lined up who is gonna OCCUPY the property, then you may not have to come out of pocket too much. study up on subject 2s and doing and leases purchases. google wendy patton's book on subject 2s and lease purchases. see, different market have different strategies. im gonna wholesale in some markets, and do subject 2s in others. diversify your thinking.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
16y
Hi, if you're going to change horses in the middle of the stream consider the easiest one in town to deal with. Now why is this elderly lady known for not being nice? Because she has had to fight with tenants for years. Why don't you make her life alot easier and approach her to buy all of her properties with seller financing, she carries the note, earns almost as much as she gets in rents, no collections, no repairs, sell and defer taxes on gains, she will love that! Tell her you have investors that will buy everything and allow the good tenants to have an opportunity to purchase their home. She will receive an income for life and her estate will not have to hassel with real estate. You can even transfer it all into a trust. You could make the old woman smile again! You might be cranky too if you had to fix hot water heaters and roofs for tenants who paid late! So, if you're thinking of changing strategies, instead of selling to her, buy her out! Bill
Homeowner · Boonton, NJ · Member since 2009 · 1 post · 0 votes
16y
Hello LaBlanca
After reading the above reply's I agree with Bill Gulley's suggestion. Owners financing is a fantastic Idea & would work if she is willing to accept payments It is a worthwhile subject to be looked into in my opinion
Huber Heights, OH · Member since 2009 · 120 posts · 15 votes
16y
In order for her to convince the seller to seller finance, there are number of things to take into consideration. Equity! Is their enough in those homes in order to seller finance. Buyers !Many of these renters may not qualify for seller financing. Re Note Buyer! These homes would need at least a few months seasoning. Simo closings are not common with the economic hard ship (In the Cash Flow Industry). Not trying to discouraging her, I would just hate to see her hurt her creditability in her small town with out a strategic plan.
LeJonR
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y
The best way to wholesale in small towns is to the end buyer. You actually bystep the step of renting by your ability to purchase low, fix up, and sell to a starter family at below retail.
This is truely a wholesale deal because you sell at wholesale prices, giving the new owner some equity immediately. You might even be able to seller finance the transaction, depending upon your purchase price.
Once you are recognized at one who can do deals you will have a list of people looking to take your available properties. And the few landlords will also take notice and you will be able to potentially wholesale some deals to them possibly without even having to do the fixup first.
In those samller towns you are actually creating your demand by the way you conduct yourself.
Yes, it can take some time, so you should also work on other avenues or areas as well.
Real Estate Investor · North Central Arkansas · Member since 2009 · 509 posts · 178 votes
16y
Originally posted by LaBlanca Ponder:
Originally posted by Troy Michaels:
I was just about to ask the question myself. i know a smaller market where there are always houses, but limited investors. maybe instead of wholesaling in that particular area, doing a different investment strategy would work. (lease purchase, subject to, etc.)
yea but if you do it that way dont you have to have money yourself?
You DO have to have money to do a Subject2 or a Lease Option. Don't listen to the guru's who preach these $0.00 investments...what happens if your tenent doesn't pay? You need to have some reserve capital in case that happens. This is the real world, not the sunshine and lolli pops that the guru's make it to be. Ethics in this or any business will take you a long way, if you can't afford to make the payment on your own month after month DON'T sign the contract.
There are lots of ways to invest in Real Estate and it can be distracting, especially when you hear of something that sounds like easy money. Bottom line is there is no easy way to make money. Wholesaling is a great way to get started so that you can learn the business, build up some capital and eventually move on to other methods of investing. Whether your in a small town or a large city, you need to be able to demonstrate your ability to follow through with your end of the deal. At the end of the day, your reputation is on the line, not the guru's who preach their nonsense.
That said, I have read Wendy's book and I am familiar with her approach I just don't think it's a good idea to follow her course unless you have some money in the bank and some experience in this business.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Jeff is so right on the matter of reserve funds. I know of a wholesaler who has a non-paying tenant in a L/O property, and without the reserves it causes financial stress to have to pay for somebody to live in a place when you're expecting that somebody to be the one doing the paying.
Real Estate Investor · Tyler, TX · Member since 2009 · 36 posts · 3 votes
16y
Originally posted by Jeff And Cheray Warner:
Wholesaling is a great way to get started so that you can learn the business, build up some capital and eventually move on to other methods of investing. Whether your in a small town or a large city, you need to be able to demonstrate your ability to follow through with your end of the deal. At the end of the day, your reputation is on the line, not the guru's who preach their nonsense.
Thanks guys...my plan is to work with wholesaling first..learn and perfect my craft..make some money and then i'll focus on some other areas of investing like jeff said...there are just so many ways to make money in real estate and as a newbie and im sure other newbies will agree..it all just gets confusing at first when your just trying to learn and people are telling you to do it this way or to do it that way..and dont get me wrong.. thats fine becuse once i learn how to do something a certain way..im glad i can come back to the forums and learn other methods as im ready for them...but for right now..my plan is to just start with the simpliest way to make money in this game and then move up from there.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
16y
Hi, sorry I've been gone awhile. Back to selling; You can buy many of the properties held by the elderly lady who is probably tired of dealing with tenants. You purchase under a seller financed transaction, you may set up assignments/modifications to sell to the tenant. If you need cash, (RE: Comment on people "Qualifying" for a seller financed note/installment contract. You don't have to sell the note, and there is no qualifying unless you sell to institutional investors, you sell the future income stream. Note sales can also be sold with recourse to cover credit issues. You should have some funds available to do any buy/hold investment in RE, people die, leave, lose jobs, etc. So you need to be able to cover yourself. It's a great way to get into the business quickly, buy out another investor! Good Luck, Bill
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
16y
Hi, you might check out blogs; [LINK REMOVED] this is a series on seller financing, real estate installment contracts and basics where investors should begin. They are my blogs, not from the official site. Hope that helps, Bill
Real Estate Investor · Atlanta, GA · Member since 2009 · 117 posts · 7 votes
16y
this may sound crazy or funny to seasoned investors, but one option if you are really afraid to jump in and have no money is this: make YOURSELF the end buyer in your first subject to deal, ( live in the thing) but make it assignable like always, build up some reserves, THEN wholesale it.