I have a great investment opportunity for the right buyer in my area and I am not sure what is the best way to get a hold of real buyers who are looking to complete deals. Alot of people in this industry as many of you know can talk a good game but fall way short of deliveirng on their word.
I have a 2 family in Brooklyn, NY that was previously an REO. My partner that I am working with purchased it with other properties and is looking to sell it because it was just thrown in the deal by the lender. It's being sold at 55% ARV (CONSERVATIVELY) but does need alot of work. We have received offers from a bunch of "posers" that just ended up having us waste time.
Any advice on how to get in contact with real local buyers in this market?
This is why you should always build up a credible buyers list in your area or other areas before you lock up a property. That way you know what your buyers criteria are and you can start finding deals based on their criteria.
Since you already have this locked in I suggest you start marketing the hell out of this property.
Go to your local REI club,do some online marketing,etc and if your deal is sound they will come to you.
I would post ads on craigslist handyman special cash buyers only must be able to close in 30 days. You can also make hand made signs and post them all over the neighborhood .
I disagree. By far the best wholesaling opportunities are in areas that 90% of investors will tell you that they don't buy in. Most investors will tell you that they want houses in high appeal areas. Problem with that is that when you go to find deals in those areas, you will be competing against everybody and their dog to find a deal. Too high of a demand will cause you to have a lower success rate when looking for deals. You need to be in an area that has a relatively good demand but also has a high supply of high-equity properties.
I have had much more success PICKING my potential farm areas where I will be wholesaling in BEFORE I ever contact an investor in that area. This ensures that I'm investing my time into an area that will have an abundance of deals. Deals are harder to find than investors. I would rather have 10 deals in an area with only 5 strong investors than 1 deal in an area with 100 strong investors.
This is how realtors qualify buyers, not wholesalers. As a wholesaler you need to feel out your buyers by conversationally asking them several pointed questions that will quickly tell you how serious their financing is. Anybody can get a POF or pre-qualification letter. That is not what you are looking for to determine how serious an investor is.
How many properties do you own?
This is the number one pre-qualifier question. If its 0 or 1, be prepared for trouble. You will be holding their hand through the whole thing IF, and that's a big IF, they can even close. 5, 10, or 30 properties tells me that they know what they are doing and I'm dealing with someone who has already jumped through the hoops before. You won't be needing to hold their hand through it. I'd still verify what they own through public records. Most people are pretty honest about this but you never know.
How fast can you close?
If its anything more than a week or two I know I'm dealing with someone who is at least a semi-newbie.
Who are you getting your financing through?
If its NOT cash, hard money, or a COMMERCIAL loan officer/department (learn the difference between commercial and residential loan departments), then you are going to have problems 95% of the time.
Those 3 questions will qualify your investor buyers more than any POF will.
If you don't know what your buyers criteria is then it's a crap shoot and that's something I don't want to gamble with.
Even if you found a property that's let's say 65% below market value that might not fit the buyers criteria in your area. Some may want as low as 50% so what may look good on paper may not necessarily be a good deal period.
I am appreciating all the feed back! Ryan you make some good points as well as pointing out some questions that I do use in my conversations to see with what level of investor I am dealing with. There really is no way to guarantee anything until the check has cleared in the bank but avoiding headaches and trouble is always a good thing.
First thing --Is it a 2 Family --meaning a Duplex rental house ? Can it be converted to a single family home? In Brooklyn-is that a rent control area ? How much rent can you get for two family ? what is real price ? How much repairs will cost ? What is your asking price --
"as -is " compare to ARV ?
In my opinion--your friend has over paid --55% ARV -- as a wholesaler and needs lot of work --also Lender thew it in --then price he paid is high--should have rejetced or offered 30 % to 35% --
Now since you already owned it --be positive and find a solution. First --get read of at same price paid -- with minimum profit to cover closing costs --meaning keep your price to quick sale price --Second --I agree 150 % with Mr Investor's comments about builing buyers list first. Third --yes --if you are becoming a wholesaler --then first have the Buyers list -- here are some suggestions --
a. Check " For Rent" sign in area and call them - they must be investors
b. Advertise in local "Penny Saver" free news paper-
c. Contact some mortgage brokers -- may have list of investors or relationship
d craiglist is also good --but do not use -- " all cash buyers only " --you may get calls or inquiries from end buyer -- for your future sells-
e. go to Home Depot or Lowe's --and ask -
at " Commercial or Conractor's desk person for referals -- or make a flyer and give to Contractors --who work for investors. Wait out side - near door --early morning --
f. You may not like it --but if you have a " HomeVestor" franchisor in your area --ask them to look at the property and make an offer --so you know what will be a good price to ask for -they may buy it --even if you loose couple thousands-
Same time --consider keeping the house --find a local doctor or attorney to come in as silent partner and let him invest cash to do rehab --then rent it out and manage for him --give him tax shelter --do a good equity sharing partnerhsip.
Also you can get Contractor to do repairs at his expense and give him good return or profit sharing --will be lot easier to sell -once repairs are done . Keep us posted what happens . Good Luck.
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