Wholesaling huge deals- ideally commercial

The whole reason I'm looking to get into wholesaling is to apply the same/similiar skillset on a much larger level- ie skyscrapers... Or maybe groups of them.

I want your guy's feedback on how high you can take wholesaling. Yes I know that naturally it may be a little more complicated the higher you move up- I'll deal with that

I know there's other occupations similiar high paying sales occupations too like land-brokering, but it seems like you could just as easily wholesale a skyscraper (if you catch the deal at the right time, the seller likes you, and you can find a buyer/have one lined up)

Danny Day

Rehabber · Houston, Texas

369 posts
3 awards
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Oct 12 '11, 01:08 PM

Can you post your strategy? What kind of consideration will you be putting down to get a skyscraper under contract? Do you have a legal team ready to deal with the sellers legal team?

First questions in my head. Not trying to discourage you, but it will be very, very complicated.

Danny

Tommy R

Wholesaler · Orange County, California

34 posts
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Oct 14 '11, 08:14 AM

Danny, I don't imagine a legal team would need to be involved, simply some good sales skills/rapport with the seller.

I would imagine this being done as an option. If it was an enormous deal, say a 1B ARV property (the value of a casino in Las Vegas) I could offer say 1m as an option to move it in a month.

If I was really good, I wouldn't even need to use an option to tie it up especially if I had a very motivated seller.

Same principles as a small deal. Just bigger/possibly a little bit of capital involved on your end.

Potential reward? Enormous.

Todd Bayer

Note Investor · Moreno Valley, California

43 posts
2 awards
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Oct 14 '11, 10:57 AM

Tommy,

I can appreciate your enthusiasm, but in large commercial deals such as a casino, there are MANY more facets to the deal than with a residential deal. I am not trying to discourage you, simply trying to show the harsh realities. There will be attorneys involved for sure, you MUST have one -- there is no exception to this. You can very easily put yourself on the line for $1B and if you don't come up with it, there is a team of lawyers working for the seller that will get everything they can from you. In addition to that, the number of buyers who can easily spend $1B are harder to come by than a residential buyer who can afford to invest $1M. Also, when it comes to things like casinos, it's more than just the real estate and land you're selling, there's another category called 'fixtures' you should look into and also all the other shops and restaurants that may be leasing space inside the casino. There's possibly a hotel involved which may be another entity. This is just the surface. To move a property of that size in a month is beyond optimistic. You'd be lucky if you closed a deal that size in 6 months. The buyer would want to look at every possible detail of the deal which includes documentation for every square foot of the land/structure. This paperwork alone could take quite a bit of time to go through. The reward could be tremendous but in my opinion, it would require more than just sales skills/rapport with the seller. These are the types of deals Donald Trump structures. He can move them because of his vast influence and network. He has a reputation to go with it. That is something that doesn't happen overnight, it takes a great deal of time and experience to get to the level he is. But, on the bright side -- it's definitely not impossible and I hope one day to be reading about Tommy R in Forbes, The Wall Street Journal, Time, etc... Good luck!

Stinson Bland

Wholesaler · Dallas, TX

294 posts
9 awards
50 influence

Oct 14 '11, 11:10 AM

Tommy,

Tell us about your wholesaling experience with high-end properties. What's the largest deal that you've moved? How do you expect to get in front of these big time sellers? Why would someone trust you with a $1B dollar property? How many $1B buyers do you have in your network?

I imagine you would have a lot of legal work to get such a property under contract. I also imagine any seller of that size would be sophisticated and put a non-assignment clause in the contract. And I also imagine they'll want you to put a lot of collateral up to get the deal under contract. They most likely would also want to check your history of buying moving large properties and they'd want to look through all of your financials to ensure you have the capability to do what you say.

I appreciate your ambitious goals but it's best that you're realistic with them. Great salesmanship alone is not going to get such a deal done.

Bradley Glaves

Commercial Real Estate Broker · Bluffton, South Carolina

34 posts
1 award
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Oct 31 '11, 04:03 PM

Tommy,

Wholesale transactions don't take place often in Commercial. Bulk sales, yes. Then a Bulk Buyer may sell off what he doesn't want to keep themselves and this maybe a wholesale transaction.

You also have to be direct to source. So if you don't control the deal it's hard to take a position.

On the other hand, you can act as a scout. I work with a number of very good scouts (a bit different then bird dogs) wherein they gather credible buyer's criteria for me.

I give them a lot of support and they do a great job. If one of their buyers closes on a property they benefit.

Since the deals are much larger the benefits to a scout are sizable.

Let me know if this is helpful?

Good luck, Brad

Sandy S Harris

Real Estate Investor · Los Angeles/Santa Barbara, California

70 posts
1 award
51 influence

Jan 10, 02:42 PM

Wow, @Bradley Glaves prospect of property scouting for commercial has really piqued my interest. How would one go about this task?? I'm just getting started in wholesaling multi-family, along with bird dogging and would love to know more about scouting either multi-family or other commercial properties.

Thanks in advance.

Steve L.

SFR Investor · Rancho Cucamonga, California

890 posts
8 awards
59 influence

Jan 10, 11:36 PM

This is not easy. Commercial transactions typically take 3-12 months to complete and there is much more negotiation along the way. UCC liens, financing issues, entity structure, business valuation, property valuation, environmental studies.

I have been involved in the brokerage of many gas stations. Average escrow takes 4-5 months. 50-60% fall out along the way.

You would be better served becoming a commercial agent. You don't have to put the option fee down and you still get a pretty big pay day if you are successful. 3-10% on million dollar transactions adds up if you can bring it to the finish line.

Sandy S Harris

Real Estate Investor · Los Angeles/Santa Barbara, California

70 posts
1 award
51 influence

Jan 11, 06:35 PM

@Steve L. you are so right, the % on large transactions do indeed add up. In my first deal as an agent, my buyers purchased a towing business, as well as the property in Riverside. We closed at 3.5 million and took 6 months to get it done, albeit at 3% commission.

One of the reasons that multifamily is so attractive is that alot of the issues with a tow lot or gas station don't come into play, particularly with smaller complexes. I'm currently studying for the broker's exam, so what you say has lots of merit. Thanks!

BTW, I really enjoy your site. I especially liked your blog post on what you would do if you were starting out as a wholesaler-Good Stuff.

Delondon Dear

Real Estate Investor · 30906, Georgia

142 posts
3 awards
50 influence

Jan 12, 10:17 AM

Tommy market for buyers of this type of transaction and see what you can come up with. See what they are looking for and market for sellers in these areas. As simple as that.