Flipping properties with less hassle

[Antonio Bodley]

What wholesale flips would you say is a lot less of a hassle? Would that be flipping properties directly from sellers, REO's, HUD's,or foreclosures. Explain why.

[Jon Holdman]

REOs are going to require a significant earnest money and the bank may put restrictions on resale in their addendums. At the very least, the won't allow an assignment, so you will need to do a double close. That's likely to require a transactional lender, unless you have your own cash. The upside is REOs and short sales are readily listed on the MLS, so they're easy to find. That's the downside, too. Investors can already see them on the MLS. So, unless you're getting something under contract at a significant discount from the MLS listing price, you're not really adding much value.

HUDs are even more restricted. I know one guy who wholesales these by buying in an LLC then selling the LLC. At least around here, HUDs require significant earnest money. And, if you get an accepted contract, the EM is committed. You will NOT get it back if you don't close.

Private sellers won't have these restrictions, but you have to chase them down. Bandit signs, door-knocking, direct mail or some other marketing technique. Then you have to negotiate to get to a deal. And convince them its OK to have people tromping through their house to take a look.

The humor is in thinking there is any low-hassle way to do this business. Is often offered up as a quick and easy way for a new "investor" with no money to make a big paycheck. That's a line of BS being fed to you by someone who's trying to sell you something. Usually a home-study course, a weekend boot camp, and a lengthy and expensive mentoring program.

Can you make money wholesaling? Yes. You can also make money being an agent, and wholesaling is effectively the same job (doing a job, not investing, which is why I quote "investor" above.) You'll have to get out there and find deals. And learn to navigate the complexities that will come up. And hound your buyers to get to the closing table. Possible, yes. Low-hassle? Probably not.