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Wholesale real estate

Posted Jan 23 2022, 15:57

I am very new to this and I have found what I think is the perfect opportunity. I was scrolling through Zillow and found a 5 bedroom 2 bath home listed at $215,000. The seller has an ARV appraisal at $290,000, but I'm not sure how to initiate the first step and to go about getting this deal.

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Tristan Gardner
  • Rental Property Investor
  • Mansfield, OH
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Tristan Gardner
  • Rental Property Investor
  • Mansfield, OH
Replied Jan 24 2022, 06:51

I'd air on the side of caution when using wholesaler's ARV values. You should always run your own numbers, be I'd be even more diligent when it comes to using the numbers provided by someone whose incentive is to sell the property quickly.

The wholesaler has the property under contract so you'll have to work with them to purchase. 

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Peter Mckernan
  • Residential Real Estate Agent
  • Irvine, CA
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Peter Mckernan
  • Residential Real Estate Agent
  • Irvine, CA
Replied Jan 24 2022, 07:07

@Thomas Hadley the first thing to do is confirm the selling price by pulling your own comps, if you do not pull your own comps and depend on the seller's numbers they maybe way off from the out price on the property. Also do your own due diligence when someone is trying to sell you a deal, and this goes for all properties. 

The second thing to do after you confirm that the numbers are true on your side to make the money on the deal that you are looking for (or the return), then reach out to the seller with your price along with negotiating terms/price to put on an agreement (always have something in writing once you agree to terms/price). While you are doing all that get a title rep from a local office to send you a title report, get any items from the seller on disclosures etc so you are not going into the purchase with a bad foundation that will cost you $15K to fix and kill the deal before you open and or close on the property. Also make sure you have title/escrow picked out for the transaction once you get that agreement in writing and do all the steps above. This is a quick course, there are a little of other things in between all this stuff.  

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Jonathan Greene
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  • Mendham, NJ
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Jonathan Greene
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  • Mendham, NJ
Replied Jan 24 2022, 07:09

Your first mistake is this - "I was scrolling through Zillow". You don't find wholesale deals on Zillow. Everyone, their mother, their grandmother, cousin Skippy, have all seen that on Zillow. It's either listed on the MLS or a FSBO and neither are going to work for wholesaling. If you see a differential in value like that, it's because it's on a sinkhole or has a cracked foundation, but you did not find the deal of a century to wholesale on Zillow, that is for sure.

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Nick C.#5 Real Estate Wholesaling Questions & Answers Contributor
  • Specialist
  • Tampa, FL
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Nick C.#5 Real Estate Wholesaling Questions & Answers Contributor
  • Specialist
  • Tampa, FL
Replied Jan 25 2022, 08:27

If you're going to make it as a wholesaler you'll need to be able to source off market deals. Without the ability to do this you're wasting your time.